Post on 29-Dec-2015
Big Data
Competition Considerations
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Data important to business model in certain sectors
“Gigantic datasets … extensively analysed using computer algorithms”*
What is Big Data?
Big Data growing rapidly: McAfee: companies that make the most of their data are 5% more
productive and 6% more profitable than their competitors IDC: big data will generate $125 billion in 2015; will grow worldwide
at CAGR of 40% (about seven times that of the ICT sector overall)
but let’s be considered in assessing potential harm
* Article 29 Working Party, Opinion 2013
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Transform Europe's service industries by generating a range of innovative information products and services
Increase productivity of the economy through improved business intelligence
Help to address many challenges E.g., Environmental, cybersecurity, traffic
management Improve research and speed up innovation
E.g., health and epidemiological research Reduce costs through personalized services Increase efficiency in the public sector
McKinsey: possible savings of up to €300 billion a year in the EU
Advantages of Big Data
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Competition Law and Big Data
Fundamental question – what is ‘big data’? Not only personal data; also includes aggregated and
anonymised data sets Used as an input in many industries (not only GAFA)
Online advertising – used to target ads FMCG (incl loyalty schemes) – inventory management and targeting ads Travel and local (incl user reviews and frequent flyer schemes) – load/inventory
management eMedicine and other eServices - personalisation and real-time management of
patients Search data – used to improve tail query results
Nature of the data is important Not a new phenomenon Volume of data generated and analysed is new, as are some uses
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Data is an “input” – nothing about it warrants departure from normal application of competition rules
DG COMP has considered data as an input in a number of cases, most recently, Facebook/WhatsApp
Data increasingly used to monetise multi-sided online markets (where one side is “free” and another pays), such that the data is critical to both sides: On consumer side – improves relevance/ quality of service
(attracting and retaining users) On merchant/advertiser side – delivers targeted
advertising/offers (attracting advertisers) Consumers (on “free” side) can provide data directly (e.g., in user
profiles) or indirectly (e.g., what they view/listen to, where they go) One data set can be used in multiple markets
Competition Law and Big Data
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Like other inputs there are key threshold questions to imposing an obligation to share data (Bronner framework, essentially): Replicability
User multi-homing Multiple layers in stack have/access same data
Exclusivity Degree to which data is important to competing in a
downstream/related market Assess each type of data in context of market in issue – need to
understand how each market functions, parameters of competition, sources of data and market positions of entity(ies) to determine potential for competitive harm
Competition Law and Big Data
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Competition concerns may arise Exclusive access to data used to raise rivals’ costs or otherwise
disadvantage rivals (preventing entry and expansion) Reviewed in Google/Doubleclick, M-commerce, Publicis/Omnicom
Potential network effects – where entity has market power that enables control over further data collection, incentives (and ability) to exploit existing power might increase Reviewed in Google/Doubleclick, Facebook/WhatsApp
Potential cross-platform network effects – e.g., advertising and user services Under consideration in Google search
Potential scale effects – e.g., tail search queries Under consideration in Google search
Competition Law and Big Data