The European Data Protection Supervisor (EDPS), an independent supervisory authority for the protection of personal data and privacy, recently called for closer interaction in the fields of competition enforcement, consumer protection and privacy. The EDPS also called for closer interaction between the different regulators in these fields.
On 26 March 2014, the EDPS published a preliminary opinion on "Privacy and competitiveness in the age of big data: The interplay between data protection, competition law and consumer protection in the Digital Economy" (the Opinion). The Opinion is drafted against the backdrop of the increasing use of large data sets.
According to the EDPS, personal information has become "a form of currency to pay for so-called 'free' online services". This should be taken into account when determining market power. For instance, in terms of market definition, the EDPS considers that the explosion of data collection could result in a completely different market definition than the one adopted by the European Commission in the Google/DoubleClick merger in 2008 (Case COMP/M.4731) if the Commission would carry out its analysis today. In addition, it explained that a finding, under competition law, that personal data collected in an upstream market is used for a different purpose in a downstream market, could help highlight instances of breaches of data protection law.
As regards the assessment of market power, the EDPS points out that power in the digital economy is partly driven by the degree to which a given undertaking can actually, potentially or hypothetically collect and diffuse personal information. Consequently, a relevant market share held by a provider of a free online service cannot easily be calculated by reference to data on traditional sales or volume. The EDPS recommends that, by considering competition and data protection requirements together, implications for consumer welfare could become clearer.
This also applies to merger cases, with respect to which the EDPS held that "if market power in the digital economy can be measured according to control of commercialisable personal information, then merger decisions could in turn take account of the market effects of combining these capabilities".
The EDPS concludes that it is essential to explore synergies in the enforcement of rules regulating anti-competitive practices, mergers, the marketing of so-called "free" online services and the legitimacy of the processing of personal data. It also calls for a review of competition legislation for the 21st century digital markets.
In addition, the EDPS maintains that the widespread use of misleading privacy policies justifies a new concept of consumer harm for competition enforcement. To counter this consumer harm, the EDPS recommends using competition rules to promote privacy-enhancing services.
The Opinion shows the increasing interaction between competition law and the fundamental rights of EU citizens. In particular, data protection rules must not only be taken into account to meet formal requirements, such as with respect to discovery or access to e-mail, but also for substantive issues including market definition, market power, abuse, imposing remedies, etc.
The full text of the Opinion can be found here.
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