Out-Law News 3 min. read

Competition authorities could get greater powers to tackle 'big data issues' through new EU laws


New EU laws could be drafted in early 2017 to give competition authorities greater power to tackle "big data issues", the EU's competition commissioner has said.

In a speech in Brussels on Thursday, Margrethe Vestager said that the Commission does not object to companies collecting large sets of data or sharing data with rivals for the purpose of building better products "as long as they don't hurt consumers in the process, by undermining competition".

She said national competition regulators across the EU need "to have the tools … to enforce the rules" to deal with issues arising from big data. National regulators, businesses and consumer groups the Commission liaised with all believe EU policy makers "could do more to help national authorities do their job", she said.

"I think there's a strong case for new EU rules as part of the answer," Vestager said.

"Of course, each authority has its own national traditions. So the best type of legislation may be a directive, not a regulation. We’ll know more when we’ve finished our impact assessment. And if we do find that new EU legislation is the best way forward, I hope to put a proposal on the table early next year," she said.

In her speech, Vestager highlighted the interaction between big data, privacy and competition law. She raised concerns about restrictions businesses might place on access to data they hold, as well as with some potential data sharing arrangements. However, she said that some "data pooling" between businesses can be to the benefit of market competition and that the merger of data-rich companies will not always be a cause for concern.

Vestager said: "We don't just assume that holding a large amount of data lets you stop others competing. After all, it might not be difficult for other companies to get hold of the same data, by collecting it from their own users or even buying it in. Or the data we’re talking about might not be all that important in order to compete."

The Commission is, however, "exploring whether we need to start looking at mergers with valuable data involved, even though the company that owns it doesn't have a large turnover", Vestager said.

Companies that pool the data they hold might gain insights they could not obtain from analysing the individual datasets, she said. However, those businesses must ensure any data sharing conforms with data protection rules and that they do not "give away too much about their business" as that could lead them to "coordinate their actions, rather than competing to cut prices and improve their products", in breach of competition rules.

Vestager also said that businesses must act in a non-discriminatory fashion when sharing data with a number of different companies.

The EU commissioner said: "Companies also need to be sure that pooling data doesn't become a way to shut rivals out of the market. It's one thing to decide who you want to cooperate with. But that decision shouldn't deny the others a chance to compete."

Vestager's comments are the clearest indication yet of the additional scrutiny businesses can expect policy makers and competition regulators to place on their use and sharing of data, and any restrictions they place on rivals' access to data.

She recently said that the Commission would frown upon businesses that restrict others' access to "unique" data. Competition law expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com, said the comments about unique data suggest data "must be able to confer some type of competitive advantage to those that hold it in order for restrictions on access to it to trigger the concerns of the EU's foremost competition authority".

Lougher's comments were contained in an article highlighting competition law risks arising from data access restrictions.

Lougher said retailers, insurers, car manufacturers and the fast-growing software company Uber are among the businesses that should take note of the increased regulatory scrutiny being placed on restrictions of access to data.

He said: "All businesses with valuable datasets should be careful about shutting out others from that data altogether, such as by putting in place exclusivity agreements with selected partners, or from imposing different terms and conditions, including charges, on other companies in relation to their access to the data. Acting in a discriminatory fashion is likely to be viewed dimly by competition authorities in this developing area of law."

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