8-in-8 Recent Trends in European Law and Policy Alert Series: Competition and Big Data—Recent Developments in Europe

This is the seventh issue of WilmerHale's 8-in-8 Recent Trends in European Law and Policy Alert Series. Our attorneys will share insights on current and emerging issues affecting companies doing business in Europe and across the Atlantic. Attorneys from across various practice groups at the firm will offer their take on issues ranging from Brexit to Big Data to EU energy market regulation. WilmerHale has offices in key European capitals, including Brussels, Berlin, Frankfurt and London, as well as lawyers qualified in a range of European countries. With one of the leading European law and policy practices in the world, we follow and work on a broad range of EU legal and policy issues, including data protection and privacy, competition, trade, technology, intellectual property, financial services, and a range of other EU and transatlantic regulatory and policy challenges that our clients face. Read all issues in this series and our other recent publications.

The highly dynamic innovations in digital technologies within the past two decades and the exponential growth of computing power have led to the expansion of the digital economy and to the emergence of business models based on the collection and use of "big data." The term refers to increasingly large sets of different types of data, produced at a high speed from multiple sources and whose handling and analysis require new and more powerful processors and algorithms.1 The ability to exploit such data can lead to important innovation and efficiency gains that are often passed on to consumers.2 However, big data may also pose competition law challenges, which have recently been a point of focus for antitrust authorities in a number of jurisdictions. This update considers some of the key competition law issues related to the use of big data, especially in the European Union (EU). Both policy and competition law enforcement developments will be discussed.

Recent policy developments

EU Commissioner for Competition M. Vestager has made a number of recent statements highlighting the importance of big data for competition law3 and will host an open conference on this topic in January 2019.4 In addition, a panel of three experts was appointed in March 2018, to serve as special advisors to the Commissioner for the period of 1 April 2018-31 March 2019. They are to work on a report focusing on the implications of the key upcoming digital changes for competition policy, markets and consumers. This report is intended to complement the input the Commissioner receives on the subject.5

Similar developments are expected in the United States. Only a month ago, the Federal Trade Commission (FTC) announced that it will hold a series of public hearings on "Competition and Consumer Protection in the 21st Century." The hearings, which will take place September 2018-January 2019, will focus on whether broad-based changes in the economy, evolving business practices, new technologies or international developments might require adjustments to competition and consumer protection enforcement law, enforcement priorities, and policy. The main objective is to evaluate the FTC's near- and long-term law enforcement and policy agenda.6

Various other policy developments have taken place recently:

In October 2016, a public consultation on a potential reform of the EU merger control rules was launched by the European Commission (the Commission). This consultation lasted until January 2017, and the results have been published online.7 One of the objectives of the consultation was to assess the effectiveness of the current turnover-based jurisdictional thresholds of the EU Merger Regulation, particularly with regard to acquisitions in the digital and pharmaceutical sectors. One of the questions discussed was whether/how to capture mergers between established companies and entrants with no or a smaller turnover, which are, nevertheless, data-driven innovators or have access to a large or valuable database.8

At EU Member State level, Germany and Austria introduced additional, value-based thresholds in 2017.9 It is not yet clear whether this will be followed by a reform of the EU Merger Regulation along similar lines. In addition:

The Competition and Markets Authority in the UK (CMA) published the report The commercial use of consumer data in June 2015. This document highlighted various competition law issues potentially arising in connection with the collection and use of consumer data by firms; it also discussed related consumer protection law and regulation questions.10 The publication of the joint report Competition Law and Data (the Joint Report) by the French Competition Authority (FCA) and the German Federal Cartel Office (Bundeskartellamt or BKartA) followed in May 2016.11 The FCA subsequently opened a sector-specific inquiry into the online advertising market,12 while the BKartA followed up on the Joint Report with investigations into the social media sector. The Italian Competition Authority, Data Protection Authority and Communications Authority launched a joint fact-finding survey on big data in May 2018. This is intended to help the Competition Authority gain a better understanding of the implications of big data in the exercise of its duties in terms of both protection of competition and consumer protection. An interim report was published on 8 June 2018; the survey is expected to be completed by the end of this year.13 At the international level, in November 2016 the 126th meeting of the Competition Committee of the OECD held a hearing to discuss big data and the challenges of adapting competition policy to the digital economy, with presentations by experts from academia, the private sector and public agencies.14 This was followed by a similar roundtable on algorithms and collusion in June 2017.15

Recent developments in competition law enforcement

There have been significant big data-related developments in the main areas of competition law enforcement, i.e., merger control, abuse of dominance and anti-competitive agreements.

1. Merger control

   (Big) data as an input

   In certain markets, access to data can be a key asset or input for the success of a company. This is especially the case in the digital sector. Consequently, many firms choose to acquire or merge with other companies that own large datasets. This is an increasingly common phenomenon, with OECD data showing that these transactions almost tripled over the 2008-2012 period.16 High-tech deals represented almost 30% of the total $2.5 trillion of completed M&A transactions in 2016.17

   Depending on...