Data, Antitrust and its academic discourse

After it was out muscled by Microsoft, Salesforce’s allegations against Microsoft-LinkedIn deal from the buying race has ignited debate among academicians in competition law regarding anti-trust issues which “Big-Data” put up in the age of digital economy.

In a statement made by Salesforce’s chief legal officer Burke Norton have alleged that, “by gaining ownership of LinkedIn’s unique dataset of over 450 million professionals in more than 200 countries, Microsoft will be able to deny competitors access to that data, and in doing so obtain an unfair competitive advantage.”

In a reply to Salesforce’s contention before the EU regulator, Brad Smith, Norton’s counterpart at Microsoft, has tried to play down the allegations by stating that, “Salesforce may not be aware, but the deal has already been cleared to close in the United States, Canada, and Brazil. We’re committed to continuing to work to bring price competition to the CRM (Customer Relation Management) market in which Salesforce is the dominant participant charging customers higher prices today.”

Though it is debatable, whether Europe’s competition regulator will open any investigation into this deal but Margrethe Vestager have shown her interest in the application of competition laws in the newly developed digital economy as she has stated that, “a company might even buy up a rival just to get hold of its data, we are therefore exploring whether we need to start looking at mergers with valuable data involved.” Though she did not mentioned Microsoft Corporation in particular but her interest in the big data is long drawn as she has made similar statements under commission’s January, 2016 announcement which goes by the heading “Competition in Big Data world”.

Interest of competition authorities of Europe in “Big-Data” is only academic. As till date, no such case has come up for consideration. Though Google/Double click case (COMP/M.4731) came close but never raised any issue of competition as it did not give any competitive advantage to the Google that cannot be replicated by others in business.

The Debate is further complicated by the addition of “data protection” angle. Preliminary opinion of European Data Protection Supervisor (EDPS) published on March 2014 argued about interplay of competition, big data and data protection which accentuated the discussion on current topic. The report called for a more “holistic approach” to the regulation of data protection, competition and consumer protection laws and discussed how data protection regimes in certain cases can make any enterprise dominant and can even lead to abuse e.g. where dominant entity refuses to supply competitors with data sets by claiming adherence to data protection rules and may even force consumers to sign unfair privacy policy terms.

Source: elearningindustry.com

Last scenario mentioned above, was seen in action on March, 2016, when German Federal Cartel Office (FCO) opened investigation into Facebook’s privacy policy, under Article 102(a) of TFEU for “directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions”. Commission would try to circumvent Facebook based on its decision in AstraZeneca (COMP/IP/05/737) case, where the company was deemed to have infringed Article 102 by breaching the rules relating to the patent system and misleading the regulator, which allowed to delay generic competition and derive a competitive advantage.

Taylor Wessing, an international Law firm criticizes the ongoing investigation and contends that German authorities will find it strenuous to prove its case, as it would be difficult to define “what is fair policy”. Moreover, it is the work of data protection authorities and not competition authorities to define fair policy for given the circumstances and it may prove to be a step too far for Federal Cartel Office (FCO).

Taylor Wessing has also castigated EPDS’s opinion. They argued that it would be difficult to define relevant market for “personal data”. As when it comes to personal data, it is not the sale of such data that define market share but the hoarding of such data what matters and quantifying that would be a task in itself.

Interest of European antitrust authorities in big data is further highlighted by the joint report of French anti-trust authority ( Autorite’ de la concurrence) and Germany’s competition regulator, (Bundeskartellamt ) published on May, 2016. They argued about abusive conduct which arises from firm’s capacity to derive market power from data that other competitors cannot match. Report not only talks about antitrust issues that may arise from “data advantage” such as exclusion, refusal to access and discrimination but also balances its view by arguing that accumulation of data also results in consumer’s welfare in the form of advanced and targeted advertisements and search results.

Report cites various cases as examples such as Facebook/WhatsApp(COMP/M.7217) and Microsoft/yahoo merger were European commission not only failed to establish any case of competition violations but also acknowledged the pro-competitive effects of Data accumulation.

This makes it clear that antitrust laws when contemplated in the context of Data, whether under vertical or horizontal agreements, abuse or combination, should be viewed from the prism of Rule of reason rather than per se rule. Same is argued by Mathew Hall of Macguire Woods LLP , who says that,” Competition law is case specific and will not solve all the problem around the big data”

This debate will not see its end soon as such academic issues rarely intrigues adjudicatory authorities. But ever growing size of digital economy and applications of “big-Data” warrants such discussions. Moreover, Indian authorities should take cue from such deliberations as when it comes to Data and challenges thrown by it, they will find themselves ill-equipped. Inability of India to handle such cases is due to the fact that development of anti-trust jurisprudence is at nascent stage and it lacks comprehensive data protection regime. Though authorities are contemplating establishment of Data privacy law in the form of Right to Privacy Bill, 2014 but currently, bill is in limbo.

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