The Italian Competition Authority, together with the national regulators for communications and data protection, opened a joint market investigation on Big Data. The investigation appears to be wide-ranging, covering not only competition issues, but data protection, consumer protection and pluralism in the digital ecosystem. The investigation follows closely, in time, the report published by the French and the German competition authorities on 16 May 2016, thus signalling a high level of attention across the EU towards the ever-increasing role played in our economies by data collection, processing and use.
Big Data and Competition
According to the press release issued by the Italian Competition Authority, “Big Data” differ from other data for the large amount of collected data (Volume), their continuing evolution and speed of analysis in real time by means of complex algorithms (Velocity), as well as their diversity depending on their content and format (Variety).
Big Data play a strategic role for online platforms (or for the economic operators that deal with them), which increasingly resort to extraction, treatment and processing of information and personal profiles made available by individuals, companies and institutions through the web and by using online services.
The Italian communications regulator is already investigating possible regulatory intervention to ensure access and competition with regard to consumer communication services (i.e. message, photo and video exchanges applications) and platforms providing more specialised services (i.e. transport services, short-term lets), as well as the role of digital platforms in disseminating information.
The newly opened investigation aims inter alia to examine whether, and under what circumstances, Big Data can translate into barriers to market entry or favour conduct restrictive of competition, with a focus on the impact of platforms and algorithms on the competitive dynamics on digital markets.
The French and German competition authorities, in their analysis, noted that the risk of foreclosure associated with concentration of data in digital industries has mostly been looked at in the context of merger control. However, they pointed out that it is also possible that there may be data-based anticompetitive conduct of an exclusionary or exploitative nature. In these cases, however, possible theories of harm would be premised, for the most part, on the capacity of a firm to derive market power from its ability to sustain a data trove unmatched by its competitors. In such instances, a case-specific assessment of the reality and extent of the “data advantage” needs to be undertaken, having regard, in particular, to scarcity of data and ease of replicability and to the scale and scope of data collection.
While the findings of the Italian investigation may turn out to be in principle similar, the devil is in the details and it remains to be seen whether national competition authorities will adopt, in practice, a convergent approach.
At the EU level, the Mid-Term Review on the Implementation of the DSM strategy adopted by the Commission on 10 May 2017 does not address the issue of the alleged new forms of market power deriving from large internet platform receiving, gathering and using massive amounts of data. The issue is however addressed by the Final Report on the E-commerce Sector Inquiry, which points to possible competition concerns relating to data-collection and usage, such as the exchange of competitively sensitive data between marketplaces and third-party sellers or manufacturers with their own shops and retailers.
In the meanwhile, and while awaiting DG COMP’s next steps (if any), one may wonder whether action by individual national competition authorities may be the most efficient strategy to tackle the global issues raised by Big Data.