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Global Media and Communications Watch The International Legal Blog for the Tech, Media and Telecoms Industry
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Big Data – Big Competition Issues? German and French antitrust regulators publish joint paper “Competition Law and Data”

Big data is no longer a term used only by the digital economy. Competition law agencies in Germany and France significantly ramp-up their enforcement tools in the light of technology-driven market changes. As regulators aim at being on par with market players dealing with big data, such companies need to carefully analyze whether the approach taken in the EU can affect any planned transactions or whether their business model contains any risks of being reviewed by the agencies.

The German Bundeskartellamt (Federal Cartel Office or FCO) and the French Autorité de la concurrence (French Competition Authority) on 10 May 2016 published a joint report on Competition Law and Data (Report). The same day, the French Competition Authority announced the launch of a “full-blown sector inquiry into data-related markets and strategies” towards the end of this month. This follows an investigation by the FCO launched two months ago into whether a potential breach of data protection rules can constitute an abuse of dominance.

In the Report, the French and German competition enforcers analyze the implications and challenges for competition authorities resulting from data collection in the digital economy and other industries and  companies seeking to protect their already built-up “data advantage”. The Report aims at providing an overview on the relevant issues and to discuss various interfaces between big data and established concepts of competition law enforcement.

As set out in the Report, the emergence of companies generating high turnovers with business models which involve the collection, processing and commercial use of (often personal) data gives rise to discussions. Competition law can be specifically relevant with regards to the assessment of data as a factor to establish market power. Thus, the new competition law focus on big data goes far beyond potential adjustments to established merger control regimes (see our related blog post on Germany’s plans to strengthen merger control for the sale of start-ups). The Report also puts various potential “data-based” conducts in the competition authorities’ spotlights and discusses them on the basis of the established theories of harm.

In particular, the Report identifies two main aspects when assessing the relevance of data for competition law enforcement, specifically when looking at data’s contribution to market power:

  • Can the data under consideration be easily obtained by competitors, i.e. is there scarcity of data or can it be easily replicated?
  • Does the scale and scope of the relevant data matter for the assessment of market power?

Against this background, the Report acknowledges that while “data is everywhere”, the actual extent of substitutability between different types of data has been considered in several past cases. It calls for a case-by-case assessment of competition law risks resulting of companies with a significant “data advantage”. The lack of a safe harbor and predictability of such an individual assessment requires companies to self-assess whether their business model is in line with the French-German approach.

France and Germany coordinated closely with the European Commission when working on the Report in an attempt to avoid a regulatory patchwork rug. However, the fact that national authorities deal with these questions at the same time when the EU Commission is actively pursuing its Digital Single Market Strategy (DSM Strategy) is a challenge for companies as they need to keep up with the pace of several regulators in Europe.