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European Commission eyes new European rules for Big Data and Competition law

EU mainEarlier today Margarethe Vestager, the European Competition Commissioner, delivered a speech about Big Data and Competition law. The Commissioner made several key points that emphasize the growing economic and competitive significance of data and data aggregation. More importantly, the Commissioner announces that she will propose a new EU Directive to ensure the consistent application of competition law on big data issues throughout the EU. In particular companies dealing with large volumes of data should closely follow these developments.

The speech focuses on three main topics:

  • Data as an asset: the Commissioner recognised that data has an inherent value and that the aggregation of data can create competition concerns. While there have been merger decisions wherein the Commission has analysed the competitive effects of data aggregation, Commissioner Vestager suggested that there may be a gap in merger control enforcement, that there may be transactions involving the acquisition of large amounts of user data that do not fall under the Commission’s jurisdiction simply because the owners of that data do not currently generate significant revenues. As a result, the Commission is “exploring” whether to implement a mechanism that would bring such transactions under its jurisdiction.

  • Data pooling: the Commissioner focuses on this topic and takes a rather moderate tone by underlining the potential efficiencies of sharing data between companies and how such data pooling can help smaller companies compete with larger players. She acknowledges the massive gains available to citizens if big data can be used effectively to improve products and benefit consumers. However, companies need to make sure that data pooling does not result in a coordinated behavior on the market. Interestingly, the Commissioner refers to the EU Horizontal Guidelines for the competitive assessment and also classical safeguards for information exchange (aggregation and anonymization of data, etc.). In some situations it may be challenging for companies to find concrete guidance in these guidelines because as Ms. Vestager notes “the competition rules weren’t written with big data in mind”.
  • Effective enforcement: The lack of concrete guidance at the EU level appears to be the background to the most important part of the Commissioner’s speech. She points to on-going investigations and national enforcer cooperation on big data, like the joint paper by the German and French competition authorities, as a good first step in understanding the potential issues. And yet, the Commissioner underlines that “there’s a strong case for new EU rules as part of the answer”, and suggests a new directive might follow, as soon as early next year. The preference for a Directive, over a Regulation, suggests that Member States will still be free to impose stricter rules in their own jurisdictions.

The Commissioner’s speech is an important signal of things to come, and shows that the Commission is ready to take the lead on competition policy in the emerging field of Big Data. It remains to be seen whether these efforts will lead to more predictable competition law enforcement in the EU and its Member States and whether this will help create a more robust and dynamic market where data is used as a resource.