By:
Gregory P. Bufithis
Founder/CEO
The Project Counsel Group
10 May 2016 – Two months after Germany’s Bundeskartellamt began an investigation of whether Facebook abused its position on the social media market by imposing unfair terms on its users, France’s competition authority today said it intends to launch a “full-blown sector inquiry in data-related markets and strategies”, which it expects to open officially by the end of May.
In a statement made to Global Competition Review, Bruno Lasserre, the president of France’s Competition Authority, said that while Germany’s competition enforcer has already opened an abuse of dominance investigation into Facebook, Lasserre said “we prefer a full sector inquiry, which will focus more on our specific worries about promotions and advertising which rely heavily on collected data on consumers.”
In March 2016, the German enforcer took issue with Facebook’s practice of requiring users to give up their personal data, and imposing allegedly unclear and unfair privacy terms.
The French and German enforcers are two of Europe’s most visible and dynamic competition authorities; this report seems to be a way of appearing as a united front after having diverged on its handling of Facebook, as well as on the country’s probe into Booking.com.
At a corporate counsel workshop I attended in Paris, presenters noted the use of data, particularly in digital markets, will be an area of intense scrutiny in the coming years. While competition enforcers in the past have looked at the subject mostly in the context of merger control, they are now gathering information within the context of sector enquiries and it would not be surprising to see the authorities tackle this within the context of antitrust proceedings in the near future.
The revelation of a future sector inquiry comes on the same day as the French and German enforcers released the results of a joint study on big data and competition enforcement.
Today’s report flagged that competition authorities first started to examine the interplay between big data collections and competition law in 2008, with Google’s 2008 purchase of online advertising server DoubleClick, and then again in 2014 when Facebook acquired messaging platform WhatsApp. As I noted in my wrap-up of the Facebook/WhatsApp review, the use of personal data was a major point in the investigator’s review … but it still sailed through.
The report pointed to both Google and Facebook as prominent examples of companies that have “extremely significant turnovers” resulting from recent developments in digital markets, although the concerns that arise extend into other sectors, such as energy, telecommunications, insurance, banking and transport. Competition authorities have understood that data is key for market entry and growing a business, that data is now everywhere and is especially crucial in platform business models where the winner takes all. They will want to make sure that the innovators of tomorrow are not prevented from competing with those of today.
The European Commission is examining how consumer data is utilized as part of its Digital Single Market Strategy. Last year, the UK’s Competition and Markets Authority released a report on the impact of big data on competition, and the Italian Competition Authority launched a sector inquiry regarding personal data collection.
