Big Data: A (further) hurdle for dominant companies

In a world of ever-increasing collection, analysis and commercial
exploitation of data, “Big Data” we are (repeatedly) told, “is the
new oil”.  However, as drilling
begins in the Big Data economy, questions are being raised over the role of competition
law in controlling the commercial exploitation of data. 

Back in 2012, the (then) Vice President of the European
Commission, Joaquín Almunia, prophesied that, in time, Big Data could raise
competition issues:

“Traditionally,
the storage and treatment of personal data has been the province of laws and
regulations designed to protect the privacy of citizens….  DG Competition has yet to handle a case in
which personal data were used to breach EU competition law. But we cannot rule
out this eventuality. In time, personal data may well become a competition
issue”

As competition authorities begin to grapple with some of the
competition law issues arising from the commercial exploitation of data, Mr Alumina’s
premonition has now become a reality.  Of
particular note are two recent cases that highlight how Big Data can give rise
to big competition issues for dominant companies.

National Lottery, Belgium:
23 September 2015

• The Belgian Competition Authority (BCA) imposed a fine
  of €1.9 million on the Belgian National Lottery for the one-off use of personal
  data it acquired through its (statutory) monopoly role as organiser of the
  National Lottery when marketing its commercial betting service
  “Scooore!” on the adjacent market of sports betting.
• The conduct consisted of using the database to send an email marketing Scooore! to National Lottery players.
• Use of the database in the competitive betting market was held by the BCA to be an abuse of the National Lottery’s dominant position in the regulated lottery market.
• Key to the BCA’s decision was that the National Lottery’s competitors could not viably replicate the database (either financially or within a reasonable timeframe), which conferred an unfaircompetitive advantage on the National Lottery.
• The National Lottery was also found to have received commercially sensitive information about competitors of Scooore!
• The fine incorporates a 10% reduction forco-operation by the National Lottery with a statutory settlement procedure.

Energy supply, France: 9 September 2014

• The French Competition Authority (FCA) issued an interim decision requiring GDF Suez to disclose part of its database of customers to competing energy companies.
• The personal data was acquired by GDF during the course of performing its (former) monopoly duties in certain French gas supply markets.
• GDF used the dataset to market the launch of a “dual-fuel”(gas and electricity) offering in an open, unregulated market.
• In doing so, the FCA provisionally found that GDF had abused its position of dominance in the regulated market to further its commercial position in the unregulated market.
• It remains to be seen whether the mode of consent for sharing the personal data was appropriate (and indeed legal).  GDF was required to invite each affected individual to opt-out of the disclosure of their data (by mail).  The result was that very few individualsopted-out and the database was used by the energy companies to mass-mail the
  individuals whose data was shared.  
• Dr Flemming Moos, Partner in Osborne Clarke’s Hamburg and Cologne offices notes that “While there are certain scenarios where an opt-out is generally
  possible, this is generally not the case if this type of personal data is
  communicated to a third party for marketing purposes“.

These two cases highlight that companies holding a dominant position in one market should tread carefully before exploiting any acquired data in other markets.

On the horizon

There is clearly appetite amongst competition authorities to
consider the remit of competition law in the context of data beyond the scope
of the dominance rules.  The European
Data Protection Supervisor and the UK’s Competition and Markets Authority are
both actively consulting on the area and have highlighted the following
potential Big Data competition issues:

• Exclusive agreements for access to data
• The assessment of mergers involving the integration of data sets
• Data protection policies as a measure 

Further developments in this area are keenly awaited.