The Creation of Data Pools as Information Exchanges: Antitrust Concerns

Abstract

In the digital market, data is a critical resource, but its handling reveals a two-sided situation. First, dominant platforms, known as gatekeepers, control major data sources. They may extract data unfairly from dependent partners, or abuse their market position by demanding excessive data for free services, and may also acquire companies solely for their data. The Digital Markets Act counters this by imposing data handling restrictions and portability duties. Conversely, nongatekeeper companies need data access to compete and innovate. The European Data Act addresses this, by granting data portability rights and promoting data sharing spaces, yet a more extensive data marketplace is needed. Data pools are essential for companies to access and use data, leading to enhanced derivative data utility. However, they pose risks of collusion, market foreclosure, and abuse of dominance. Exchanges in data pools can infringe competition rules, as seen in the CJEU Asnef-Equifax case. Data types vary from raw to processed, and meaningful information, including non-digital data. Commercially sensitive information shared in pools is scrutinized under Article 101(1) TFEU. Specific attention is needed for exchanges involving pricing, production capacities, and commercial strategies, as these directly restrict competition. Public information is exempt from this scrutiny. To mitigate collusion risks, companies can use blind sharing or limit sensitive information exchanges. Technical data pools, essential for industry and product development, are regulated similarly to patent pools, with access on FRAND terms to prevent market foreclosure. Identifying essential data or market entry as well as ensuring fair access is crucial to address these competition risks. This paper begins with a brief analysis of the central role that data collection and accumulation play in market functioning and company behaviour. In this realm, a concentrative force arises, leading more powerful companies to accumulate more data, thereby raising significant entry barriers for their competitors. Explored subsequently are the measures adopted from a regulatory standpoint to address these problems through the DMA, DSA, and the Data Act. In this context, the paper explains how data pooling represents a viable approach to address this issue. However, highlighted are also the significant competition risks that may arise from the use of this mechanism, such as facilitating collusive practices, market closure, or other exploitative abuses. Discuss next are potential remedies that can be employed to overcome these risks, and promote the use of data pools as a means to enhance accessibility and access to data. From the author’s perspective, it would be necessary to establish a safe harbour (in the form of specific guidelines on data sharing) that provides certainty about the assumptions and conditions under which data pooling can proceed, without posing a substantial risk to the competitive functioning of markets.