The ownership and usage of large quantities of data collected
online from consumers (big data) is a particularly hot topic in the
competition law community. The French and German competition
authorities issued a joint report on competition law and data in
May 2016. And the European Commission is currently requesting
feedback on whether to introduce non-turnover related thresholds
into EU merger control to ensure that big data mergers can be
scrutinised. Competition Commissioner Vestager has warned that she
will keep a close eye on how companies use data and many national
authorities will do the same. Companies are therefore well advised
to take the warning seriously and keep an eye on their approach to
On 7 October 2016, the European Commission launched a public
consultation on the functioning of the
EU Merger Regulation with a particular focus on:
the effectiveness of purely turnover-based thresholds in the EU
the treatment of cases that typically do not raise competition
the referral mechanisms between member states and the
The Commission is exploring whether mergers should be notified
by the parties if they do not reach the turnover thresholds but do
meet a certain transaction or data set value. The suggested
complementation of the current, purely turnover-based threshold
with the transaction value or the value of target companies'
datasets is of particular significance for certain industries. This
is the case in industries where the acquired company may have
achieved little turnover as yet, but hold commercially valuable
data, or have a considerable market potential through innovation.
As Competition Commissioner Vestager has
put it, "Data could be an important factor in how a merger
affects competition. A company might even buy up a rival just to
get hold of its data, even though it hasn't yet managed to turn
that data into money. "
Commissioner Vestager has
mentioned that the Ministry will keep a close eye on how
companies use data. Not only in terms of merger control, but also
by checking compliance with the cartel prohibition. Even so, there
is nothing wrong with data pooling by companies, provided that they
play by the rules laid down in the
guidelines on horizontal cooperation.
It is not only the European Commission that is eyeing big data.
Many national competition authority also have their eyes wide open.
For instance, the French and German competition authorities
joint report on competition law and data in May 2016. The
report distinguishes a number of data-related anti-competitive
practices. According to the report, the possible theories of harm
are premised, for the most part, on a company's capacity to
derive market power from its data collection or to process
activities for which two aspects are of particular relevance: (i)
the scarcity of data or ease of replicability, and (ii) whether the
scale / scope of data collection matters.
The French and German competition authorities have already acted
on the messages in their joint report by
launching a sector inquiry into data-related markets and
strategies and conducting an investigation against Facebook into
possible abuses of dominance in the social networks market with its
specific terms of services on the use of user data. The German
competition authority has also recently issued a
working paper on the market power of online platforms and
networks, discussing the factors to take into account when
determining dominance in the digital economy. The Dutch competition
authority has followed suit by launching a
market study into online platforms that offer videos and
movies, such as YouTube and Facebook, but also Dutch platforms such
as NL-ziet and Dumpert.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The European Commission recently published a draft directive to grant greater enforcement powers to national competition authorities (NCAs).
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