IGF 2021 Lightning Talk #60 The role of privacy in antitrust policy in highly data-driven markets

The Big Data & Antitrust Cycle of the Institute for Internet & the Just Society hosted “Lightning Talk #60 The role of privacy in antitrust policy in highly data-driven markets” during the 2021 IGF. Two speakers were invited:

• Ms. Nidhi Singh, who is a Panel Counsel at Delhi High Court & Supreme Court of India in New Delhi and Deputy Director at the Centre for Competition Law & Policy at GLA University
• Mr. Mario Tavares Moyrón, Senior Legal Counsel at AXA Group Operations in Paris, France.

Mr. Moyrón started off by introducing the topic by outlining his thoughts on the relationship between privacy and antitrust. He stated that competition authorities have sometimes faced backlash after taking questions of data privacy into account during, for example, merger proceedings. While many jurisdictions recognize the right to privacy, sometimes even in the respective constitutional texts, some commentators seem to not follow the notion that privacy is part of the consumer welfare that prevails in many antitrust regimes worldwide. This is already contradicting the fact that often there are data (and consumer) protection agencies that act to the benefit of consumer welfare. Problems do arise now when competition authorities need to assess behaviors or planned mergers in markets that rely heavily on data. Within the last decade, through rapid technological progress, data has become an essential facility that grants huge competitive advantages. 

While some argue now that data should not be considered to form part of consumer welfare as many give up their privacy in exchange for services, this view neglects that data is an important asset in the competitive process. In his view, it is then only consequent to have competition authorities consider questions of data protection as well. At the moment though, competition policy does usually not allow for this, so the approach as to how to solve this issue is subject to debate. One could of course consider an expansion of the mandate but it seems more likely that every authority or regulatory body should stick with its own special expertise. This would make processes for cooperation between data protection and competition authorities necessary which are not in place yet (a so-called “dialogical regulatory function” in order to avoid confusion over competencies). It is therefore up to legislators to clear the way for this evolution of competition law. He illustrates these points by making reference to the case the German Federal Cartel Office brought against Facebook, in which provisions of the European General Data Protection Regulation (GDPR) were used to actually constitute an infringement of competition law. In that case, the Competition Authority also cooperated with the competent Irish Data Protection Commissioner. The efforts that are being made in Europe, one notable example is the introduction of § 19a in the German Act against Restrictions of Competition, will eventually need to be scaled up on a more global level as data-driven markets usually have an international dimension and the same questions will therefore arise.

Subsequently, Ms. Nidhi Singh took over and underlined that the digital environment has brought drastic changes to our regulatory landscape that need to be addressed. Just like IP and consumer protection law have had their fair share of influence on competition regimes, data privacy law as a separate domain of law will more and more do so. She argues that data is particularly important in the competition since most services of big platforms are offered for free. Firms cannot compete on price, so only non-price competition remains and there are instances in which tighter or more transparent privacy policies have been considered positively by consumers. Data has proven to be crucial in merger cases as well, even though the merging parties might not operate in the same market, the acquisition of one firm’s data set can be extremely valuable to the business model of the acquiring party. 

Ms. Singh continues to cite Erika A. Doughlous who outlined two areas of tension between data privacy and competition law regimes. Firstly, companies often invoke privacy as a justification against allegations of anti-competitive behavior. Secondly, granting access to data that a firm holds has become an increasingly popular remedy to mitigate competition concerns. It seems that courts however neglect the data implications competition law cases have (“competition first approach”). As an example, HiQ v. LinkedIn is explained, a case in which The U.S. Court of Appeals for the Ninth Circuit has rendered LinkedIn’s termination of HiQ’s access to user profile data unlawful as unfair competition, even though HiQ had violated user privacy settings. This also contradicts the FTC’s enforcement policy and shows how contentious the relationship between those two areas of law is. Margrethe Vestager, the European Commissioner for Competition, has also pointed out that data has become an increasingly important factor in the competition which makes granting access to data an effective behavioral remedy in order to maintain/restore competition. Problems are posed by the mandate that competition authorities are being given which limits them with regards to the scope they conduct their investigations and assessments in. Ms. Singh suggests, in conclusion, to view competition and data protection law as complementary disciplines that should not be considered exclusively in order to do justice to the new digital economy.

One question from the audience is directed to Mr. Moyrón and concerns the implications the GDPR has in an antitrust context. Mr. Moyrón explains that often consumers do not know how their data is used and the GDPR has provided useful information in order to create more transparency for consumers. This should eventually foster competition as consumers are enabled to make better-informed decisions. Another question is directed to Ms. Singh, she’s asked whether she thinks that there is a trade-off between profits and privacy or if firms that respect privacy will be the ones that are more successful in the long run. She explains that there seems to be a conflict between respecting privacy and gathering data. While privacy might be valued by customers, big amounts of data might be a competitive advantage a firm needs over its rivals. At the same time, she observes a development that more privacy is increasingly an argument for consumers to choose a specific firm, so the balance might be shifting.