By Arletta Gorecka, University of Strathclyde

Competition law faces the challenge of digitalisation. The multitude of EU competition law goals provide a framework for concerns of effects on growth, innovation, quality, choice and friction. The lack of standardised approaches to data collection and privacy assessment poses problems for competition law, since the digital economy offers an extensive catalogue of no cost services and products, while the competition law’s traditional approach is based on the economic approach, where price plays an important part.

This blog post assesses the latest concerns on privacys role and impact of modern societal deliberations in competition law, assessing whether competition laws mandate should also consider wider public policy implications. The blog post focuses on the concept of sustainability, which by its broad and dynamic nature might allow to balance the efficiency allocation to achieve an integrated social-economic and ecological development, benefiting the current and future generations.

The concept of privacy
The OECD (2013) defined the digital economy as comprising markets based on digital technologies, operating through e-commerce. Empirically, EU competition law has identified three different phases in development of the intersection between competition and data protection laws: ignorance of data (Asnef-Equifax, (2006)), identification of parallel pathways between competition law and data protection, and recognition of data protection concerns in the competition sphere by the EU Member State practice (Facebook case (2019)).[1]However, the EU Commission disregards the intersection between competition and data protection, and places emphasis on the correct application of competition law.

It is unclear how to adequately address Big Data’s implications using competition law. The friction points between market and non-market interests are based on an endeavour to culminate economic-based interpretation of EU competition law (Gerbrandy, 2019). The digital economy has brought substantial benefits for consumers, by creating new, high quality, products and services, offered at no cost.[2] Therefore, the output might not have a decisive role, while quality, choice and innovation might be of prime importance.

Arguably, privacy breaches could reduce competitive processes. Dominant digital companies, with an ability to collect, analyse and process databases could abuse their dominant position, by unfairly harvesting data from their users. Consequently, their conduct might harm both consumer and competition by, for instance, imposing unfair T&Cs, reducing quality of goods/service or competition on a relevant market. Furthermore, no consensus remains as to an optimal method of evaluating data in EU competition law. It is apparent that EU competition law is based on a prevailing approach and assesses decisions involving data through the spectrum of keeping a competitive equilibrium in hypothetical markets. The concept of privacy is a multi-dimensional and dynamic issue, requiring careful considerations of all dimensions and interests of parties on a relevant market.

Sustainability aims at achieving integrated social-economic and ecological development that benefit current and future generations. Interestingly, any potential sustainability-focused cooperation amongst competitors might result in an increase in production or purchasing costs, which initially lead to a price-increase passed on consumers (Coates, Middleschulte 2019). It might be difficult to define integrated development priorities in the digital economy. Hence, sustainability could act as a functional interpretation of societal concerns, acting as a bridge between economic and social settings, using appropriate mechanisms created with attention to needs of countries affected. This could be of importance with 5G services imposition.

Sustainability has begun to play a role in competition law, questioning whether consumer welfare might be sufficiently flexible to help. With a growth of social and environmental protection, it could not be enough for businesses to provide products or services of good quality, but might require to take accountability for effects of their products and services in a society. As per Article 3 TEU, the way that goals of competition law goalsshould be interpreted should adapt according to the constitutional goals of the EU social market economy. It is disputed whether competition law could assist any public interest agreements, which include sustainability, as competition law assessment does not generally focus on consumer welfare (Gerbrandy, 2019). Societal deliberations are labelled as non-economic interests, and often, there are no powers (at least at the EU level) to pursue these objectives.

To a certain extent, EU competition law protects public welfare by supporting credibility of authorities (Metro v Commission, 1977). Yet, it is still unclear what outcome personal data protection brings upon ensuring sustainability of competitive restraints. Often, sustainability agreements are beyond the scope of competition law. Yet, efficiency defence (Article 101(3) TFEU)[3] could support a relationship between competition law and sustainability, as any increase in price could be balanced with a need maintain societal sustainability. Townley (2009) argued that non-efficiency goals must be considered within the competition legal framework, as jurisdiction may not have the legal capacity to achieve the ends by other means.(p. 39). Hence, this might originate to the EU legal foundation; certain matters are solely within the Member Statesexclusive competence. This is approved by the Chicken of Tomorrow case (2014), where the competitive spectre of sustainability depends heavily on how the national competition authorises and the EU Commission value the sustainability and balance this against competition law.

The societal context of data
To assess the competition law concerns of Big Data, it is important to understand how companies use Big Data. At the microlevel, the digital economy implication reshaped a relationship between producers and consumers; zero-price services produces valuable information about their consumers (Bughin, 2016).

The importance of data in society could be seen as a non-economic activity since it aims at benefiting all members of society. Potentially, the concept of social welfare could be important at capturing problems that could lead to a market that create goods which are not considered as important for the general welfare. Yet, social welfare is perceived as being a separate stream in case law, to which different criteria apply (Albany, 1999, para 84). Arguably, privacy is a complex matter from the competition law perspective, and it is beyond the scope of competition law to assess all potential public policy infringement.

From a practical view, the true value of data remains unknown. Importantly, data does not translate into money immediately. Kennedy (2017) argued that essentially data-rich companies are a significant source of innovation. Although consumer welfare promotion is a recognised goal of EU competition law, it can be deduced that the ultimategoal of competition law is to ensure the effectiveness of competition in the internal market, which aims at increasing consumers welfare (Österreichische Postsparkasse and Bankfür Arbeitund Wirtschaft, 2006, para 115). Yet, these goals are interchangeably affecting each other, as distorted competitive processes may directly or indirectly harm consumers.

Furthermore, conflicts between competition law and social concerns originate from the markets where a State introduced competition. Companies create profiles about their consumers and collect data on them; such logic has been already applied in the health privacy context. Hence, the market gained power as a prerogative of the state, by governing society and gathering data, and whether where a market took a responsibly for any public interest (Gerbrandy, 2019). Accumulation of consumersdata may enable behavioural targeting by advertising. Yet, it remains unclear how to encompass data protection principles into competition law assessments. Initially, the assessment should be based on the fundamentally restoring effective competitive process and consider all other protections only to ensure that there were no gaps in a type of protection. The test involved could be based on balancing the competition law and the protection of public concerns or imposing a privacy monitoring infrastructure necessary for competition law authorities.

The rise of the digital economy and extensive demands to protect consumersdata constitute a challenging debate for competition law. With a recent debate on sustainability and competition law, the concept of sustainability might provide a functional interpretation of societal concerns, aiming at building up the connection between economic concerns and social settings, using appropriate mechanisms created with attention to needs of countries affected. Importantly, it is difficult to measure the value of the data, as the data might be easy to replace or provide modern waves of innovation for consumers. Competition law should not be amended but seen as a process, which can be adapted into particular social concerns.


[1] Yet, if one considers the Facebook case from solely competition law perspective, the German Competition Authority analysed the T&C, which acted as a contract between Facebook and the end-users, to assess that it represented an abuse of dominant position.

[2] Both data protection and competition legal orders seek market integration advancement and share a concern for consumer welfare, with consumers benefiting from data collection in a wide array of free services, product or contents.

[3] By its nature, efficiency defence exempts any anticompetitive behaviours, providing they promote social welfare.

This paper was due to be presented in the IT Law and Cyberspace Stream at the SLSA annual conference in Portsmouth.