When two worlds collide: the interface between competition law and data protection

Abstract

In his seminal article ‘The Limits of Antitrust’, Easterbrook argued that ‘when everything is relevant, nothing is dispositive’; therefore, when applying competition law, judges should resort to clear presumptions rather than balancing the proand anti-competitive effects of particular conduct. In the intervening 20 years, much ink has been spilled on the issue of whether competition law should take into consideration wider policy objectives. This discussion has been given renewed impetus in recent months following the publication of a ‘preliminary opinion on the intersection of data protection, consumer protection and competition law’ in March of this year by the European Data Protection Supervisor (EDPS). The publication of this report was followed by a workshop held under Chatham House rules in Brussels in June, a summary of which was published by the EDPS in July. The report reflects lively discussions on several issues familiar to data protection experts, such as the role of personal data in the digital economy and how to foster privacy as a competitive advantage. However, it also serves to launch a debate regarding matters which have been overlooked or unsubstantiated thus far. Most significantly, the report queries whether the traditional tools of competition law, which focus on parameters such as price, quality, and choice can explain the impact of certain business practices on data protection and privacy. It also questions ‘wider issues’ in competition law enforcement, for instance whether the Commission’s current case-by-case approach is correct in the digital environment or whether specific guidelines or a study should be introduced to inform authorities dealing with antitrust and merger cases involving personal data. These are queries which need to be addressed and the EDPS is to be applauded for kick-starting this discussion, whatever its outcome. Many of web 2.0’s datacentric services are two-sided platforms which are characterised by network effects: the more users they have, the more users they acquire. This leads to winnertakes-all markets which makes the application of key data protection concepts, such as consent, more difficult. Quite simply, individual control over personal data (or ‘informational self-determination’) becomes illusory when individuals are dealing with monopolies. For this reason, competition law is frequently depicted as the silver bullet which will render data protection rules more effective by injecting competition into monopolised markets and facilitating individual choice. However, that competition law can or even should play this role is contested by experts in that field. A discussion on the potential—and limits—of competition law was therefore conspicuously lacking until the EDPS initiative in March. Nevertheless, it is not yet apparent whether, and if so how, the two fields actually intersect. In recent years, the enforcement activity of DG Competition has been guided by a consumer welfare standard, according to which competition law should seek to deliver benefits to consumers in the form of ‘lower prices, better quality and a wider choice of new or improved goods and services’. This approach assumes that consumer welfare is negatively affected only when a particular practice has the effect of foreclosing an equally efficient competitor