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SmartData Collective > Analytics > Implications and Goals of EU Competition Chief’s Big Data Proposals
AnalyticsBig DataExclusive

Implications and Goals of EU Competition Chief’s Big Data Proposals

Ryan Kade
Ryan Kade
6 Min Read
big data EU competition chief proposal
Shutterstock Photo - By Wright Studio
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Big data is changing the nature of business in Europe, which has not escaped the attention of regulators. The EU Competition Chief has announced that it will take stronger measures to ensure that big data is used fairly.

Contents
Goals of the EU Competition Chief’s New Big Data PoliciesEnsuring Equal Access to Big DataDebating the Competitive Advantage of Analytical CapabilitiesHow Will the Policies Affect Foreign Companies Doing Business in the EU?Will Data Privacy Rules be Viewed as a Violation of Anti-Competition Rules?

While the proposal seems practical, there are questions about the effectiveness and unintended consequences of such regulations. Regulators and industry experts are debating the exact nature of the looming big data regulations.

Goals of the EU Competition Chief’s New Big Data Policies

In 2016, the EDPS-BEUC Conference on Big Data in Brussels highlighted some of the concerns surrounding big data. The EU Competition Chief is finally implementing some of the proposed changes, but this has drawn scrutiny from industry groups.

What are the issues that these policies must address?

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Ensuring Equal Access to Big Data

In order to ensure a fair and competitive market, EU regulators must ensure all brands have access to the same data. Critics argue that this is a moot point because the vast majority of big data is already publicly available. SMEs have access to the same credit information, social media algorithms, and government statistics as their larger counterparts.

Debating the Competitive Advantage of Analytical Capabilities

Many big data experts contend that data itself isn’t responsible for any company’s competitive advantage, but rather companies gain an edge by analyzing the same data better than their competitors. This is the case with large financial companies, particularly in Forex and CFD trading. CFD investors use big data to track major market trends and place trades accordingly.

EU regulators will need to address this reality if they hope to create competitive equilibrium with fair policy. However, it is unclear what policies could possibly address this. Counterarguments to this point include:

  • Would the EU Competition Chief need to limit the resources that organizations invest in data analysis? Taken too far, this policy could curb productivity and lead to lower-quality goods and services for consumers.
  • Would less-established companies need to be given access to similar big data resources? This could artificially inflate poorly performing companies that should fail to the hands of the free market.

The competition regulator will need to consider all nuances in this discussion.

How Will the Policies Affect Foreign Companies Doing Business in the EU?

Custom Lanyards and other foreign companies are wondering how the new policy will affect them if they conduct business in the EU. Will it only affect them if they collect data on EU customers? How will the laws be enforced? Could the policies drive European companies abroad to avoid regulatory scrutiny?

Will Data Privacy Rules be Viewed as a Violation of Anti-Competition Rules?

Skadden experts Ingrid Vandenborre, Thorsten C. Goetz, and Antoni Terra warn that privacy laws could be intertwined with anti-competition laws. The EU Competition Chief hasn’t provided a detailed response to this question, and documents on a recent lawsuit the German Federal Cartel Office filed against Facebook have not been made public, so the theory has yet to be tested.

“Another area of concern is that big data could result in the foreclosure or marginalization of competitors active in markets where the data is used. Concerns include refusing to provide access to the data, requiring contractual exclusivity provisions, conditioning access to a valuable dataset on the use of a company’s own data analytics services, or using big data as a vehicle for price discrimination against different customer groups. Notably, in March 2016, the German Federal Cartel Office opened an investigation against Facebook for allegedly violating the country’s competition laws (alleged abuse of a dominant position) by infringing German data protection rules. Details of the investigation are not yet publicly available; therefore, it is unclear whether the German authority would consider a violation of data privacy rules to also be a violation of competition laws, at least under certain circumstances.”

The argument does appear to have some validity, though. Brands that violate consumer privacy laws with big data will likely have a distinct competitive advantage over competitors. This is an argument that experts in the gaming sector made against PokerStars, a company that outgrew its competitors by violating United States gaming regulations. A strong legal argument could be made that companies that violate any laws gain a competitive advantage and need to be sanctioned by the EU Competition Chief. This argument would be extended to big data.

TAGGED:big databig data analyticsEU Competition Chief
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ByRyan Kade
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Ryan Kade is the editor overseeing contributed content at Smartdata Collective and contributes weekly column.

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