Privacy as a Competition Law Concern: Lessons from Facebook/WhatsApp

Abstract

In the era of digital markets, companies are able to collect an unprecedented amount of personal information about their customers. With big data increasingly being employed in all areas of the economy, competition authorities face the question of how prominently data are to feature in competition cases. Data has played a role in a number of recent merger decisions, such as the Facebook/Whatsapp case, Google/DoubleClick case and Microsoft/Linkedin case, as well as in the recent Bundeskartellamt’s abuse of dominance investigation into Facebook. In the meantime, competition authorities face a growing public concern regarding the large amounts of data that online platforms gather about their users, and what this means for users’ privacy protection. One factor is the uncertainty regarding online platform’s privacy strategies,. Another is users’ lack of power in influencing privacy settings. Moreover, recent large-scale data security breaches have put further pressure on public authorities to regulate powerful, data-rich online platforms. This paper examines to what extent these privacy violations are a result of the exercise of market power, and what this means for competition law enforcement. Against the background of recent cases, the paper considers what the role of competition authorities should be in regulating data-based market power. Specifically, the paper evaluates the efficacy and suitability of tools such as merger review and abuse of dominance in dealing with data as a potential source of market power. The paper finally examines to what extent a stricter ex ante approach – consisting of critically reviewing mergers between data-rich companies – could reduce the number of ex post abuse of dominance cases related to data, and whether such an approach would be desirable.