Christopher Yoo on ‘Unpacking Data Portability’ (2020) Competition Policy International

Data portability has become a hot topic in competition law. Legislators and enforcement officials around the world have shown increasing interest in data portability as a competition law remedy. Although some commentators have suggested that data portability represents low hanging fruit compared with more complex remedies such as interoperability, the debate about how to implement any such mandate remains underdeveloped. This paper, available here, argues that data portability is not a panacea, and that enforcement officials will have to engage in the type of nuanced, fact-specific determinations that characterise classic antitrust analysis. Section 2 points out that not all data are created equal. To date, discussions have largely treated data as a monolithic phenomenon without drawing any distinctions among particular types of data and their different uses. Although advocacy rhetoric tends to talk about “big” data, the trade press repeatedly emphasises that size is not the only thing that matters. The most famous formulation claims that data consists of three…

Vikas Kathuria and Jure Globocnik ‘Exclusionary conduct in data-driven markets: limitations of data sharing remedies’ (2020) Journal of Antitrust Enforcement 8 511

By depriving its rivals of gaining scale in data, a dominant player can successfully exploit demand-side scale economies, i.e. network effects, to its benefit in a two-sided market. In effect, dominant undertakings may be able to exclude their rivals from accessing user data and thus deprive them of scale in markets that are characterised by network effects. In the face of exclusionary conduct by a dominant undertaking in data-driven markets, a critical question relates to the nature of the remedy that can offset the harm to consumer welfare and restore competition. Intuitively, mandating a delinquent dominant undertaking to share wrongly withheld data appears to be an optimal remedy. This article, , available here, analyses the viability of mandatory data sharing as a remedy to restore competition in the affected market – and concludes that mandatory data sharing is not the optimal solution to remedy loss to consumer welfare. Section 2 considers the objectives of remedies in EU competition law. To…

Gönenç Gürkaynak, Ali Kağan Uҫar and Zeynep Buharali ‘Data-Related Abuses in Competition Law’ in Standing Up for Convergence and Relevance in Antitrust – Frédéric Jenny Liber Amicorum – Volume I (eds. Ahmad and Charbit, 2019) Concurrences

Data has become an indispensable business tool, and, as a result, the collection and use of data by dominant undertakings can give rise to competition law concerns. This article, available here, examines data-related abuses in competition law, and seeks to provide an overview of specific types of abuses arising from the use of data. Section II looks at the definition of data. Data is often defined as “information that can be stored and used by a computer program.” Accordingly, “big data” refers to “large amounts of different types of data produced at high speed from multiple sources, requiring new and more powerful processors and algorithms to process and to analyse’. As “data” increases in volume, diversifies in nature and content, and keeps on flowing rapidly through the veins of the global economy, its collection and processing creates increasingly valuable commercial opportunities. Undertakings more and more see data as an indispensable tool for improving business decisions and strategies, and for improving…

Björn Lundqvist ‘Regulating competition in the digital economy’ in Competition Law for the Digital Economy (ed. Björn Lundqvist and Michal S. Gal) (2019, Elgar)

There is an intense academic discussion regarding whether consumers and business users are exposed to conduct that may amount to competition law abuses when using Internet services. The discussion is connected to the Internet phenomenon of ‘platforms’ or intermediaries. The multitude of direct customer–supplier transactions making up everyday business conduct are, to an increasing degree, replaced on the Internet by an intermediary, the platform, matching the customer with the supplier. Platforms are able to perform role because they provide efficient and easy matching. Further, internet platforms may, due to certain special and somewhat unique characteristics – like network effects, tipping and path dependency – become central ‘hubs’ between purchasers and suppliers. This chapter, available here, focuses on the application of competition law vis-à-vis the platforms collecting personal and non-personal data. It considers questions such as: may competition law be used to gain access to intermediaries’ data, and the infrastructure around that data? May competition law be used to limit the…

Klaus Wiedemann ‘A Matter of Choice: The German Federal Supreme Court’s Interim Decision in the Abuse-of-Dominance Proceedings Bundeskartellamt v. Facebook (Case KVR 69/19)’ (2020) IIC – International Review of Intellectual Property and Competition Law volume 51 1168

In June 2020, the German Federal Supreme Court (Bundesgerichtshof) upheld the 2019 interim decision of the Federal Cartel Office (Bundeskartellamt) ordering Facebook to stop collecting data about its users without their consent when they use apps and visit websites outside Facebook’s social network.Importantly, the Federal Supreme Court confirmed that Facebook’s data collection was an abuse of its dominance in the (German) market for personal social networks, overruling an earlier decision of the Düsseldorf Court of Appeal (Oberlandesgericht Düsseldorf). This piece, available here, explores the relevance of the case – and the courts’ different decisions – from a number of perspectives. Section II describes the Facebook case, up to the Supreme Federal Court’s judgment. In February 2019, the Bundeskartellamt found that Facebook was dominant on the market for social networks, and had abused this position by imposing terms of service allowing it: (i) to collect its users’ personal data (and data related to their terminal devices) from outside the actual social…

Rachel Scheele ‘Facebook: From Data Privacy to a Concept of Abuse by Restriction of Choice’ (2021) Journal of European Competition Law & Practice 12(1) 34

On 23 June 2020, the German Federal Supreme Court found that Facebook violated German competition law by abusing its dominance in the market for social networks. The ruling, upholding the decision by the competition authority, is a major victory for advocates of addressing data-related competition concerns under Article 102 TFEU and its national equivalents. However, instead of focusing on the intersection between competition and data protection law in its reasoning, as the competition authority had, the Federal Supreme Court relied on the concept of restriction of consumer choice. This article, available here, casts light on the Facebook case and its practical relevance. Section 2 reviews the Facebook infringement decision. In 2019, the German Bundeskartellamt found that Facebook had abused its dominant position on the German market for personal social networks by imposing unfair terms and conditions on its users. The Bundeskartellamt’s case linked antitrust violations with data protection law, and relied on alleged infringements of the EU’s General Data Protection…

Stefan Thomas ‘Harmful Signals: Cartel Prohibition and Oligopoly Theory in the Age of Machine Learning’ (2019) Journal of Competition Law & Economics 15 (2-3) 159

Information can be used by competitors to collude or to compete, and the challenge for competition law is to spot the differences. Signalling and any other type of informational exchange outside the scope of cartels are an emanation of tacit collusion. Tacit collusion, however, is generally considered unobjectionable, because firms are deemed to have the right to adapt intelligently to their rivals’ conduct. The law puts different labels on what is ultimately the same economic phenomenon, that is, conduct that leads to supra-competitive outcomes. The traditional legal approach for distinguishing between illicit collusion and legitimate oligopoly conduct is to rely on criteria that relate to the means and form of how rivals interact, such as elements of “practical cooperation” or findings of anticompetitive intent. This article, available here, contends that, outside the scope of classic cartel agreements, it is not possible to properly distinguish between illicit collusion and legitimate independent conduct by relying on proxies such as elements of practical…

José Azar and Xavier Vives on ‘General Equilibrium Oligopoly and Ownership Structure’ (2020) CEPR Discussion Paper No. DP15499

Oligopoly is widespread, and, allegedly, on the rise. Yet macroeconomic models, which focus on monopolistic competition instead because of its analytical tractability, seldom consider oligopoly. A typical limitation of monopolistic competition models is that market concentration plays no role in conditioning competition. Monopolistic competition models are also unable to look into the objective of the oligopolistic firm when there is overlapping ownership due to owners’ diversification. If a firm’s shareholders have holdings in competing firms, they would benefit from high prices through their effect not only on their own profits, but also on the profits of rival firms. This paper, available here, presents a tractable general equilibrium framework in which firms are large and have market power with respect to both products and labour, and in which a firm’s decisions are affected by its ownership structure. This framework characterises the oligopolistic market equilibrium, and then uses it to analyse whether competition intervention is appropriate, and if so how. Section II…

Karen Geurts and Johannes Van Biesebroeck ‘Employment Growth following Takeovers’ (2019) The Rand Journal of Economics 50(4) 916

This paper, available here, takes a sample of takeovers in Belgium over five years, and estimates their impact on employment growth. It finds that the average merger temporarily reduces employment of the combined entity by −1.4%. However, long-term effects are markedly different. Mergers likely to be motivated by acquiring or defending market power show a stronger and permanent employment reduction of −14%, whereas those motivated by efficiency gains lead to employment expansions of +10%. Section I sets the scene. Existing research provides a range of estimates for the employment effects of mergers, with no consensus having emerged about the predominant effect of mergers on employment. Studies that find a negative effect outnumber those that find a positive effect, but all come with caveats. At the same time, the literature has long noted the potential for efficiency gains from mergers. Acquirers often argue that reduced variable costs can offset market power and lead to lower prices, which in turn can raise…

Massimo Motta and Martin Peitz ‘Removal of Potential Competitors – A Blind Spot of Merger Policy?’ (2020) Competition Law and Policy Debate (6)2 19

Mergers that may look conglomerate or vertical at first glance may in essence be horizontal, inasmuch as they involve the removal of a potential competitor. Indeed, many conglomerate and vertical mergers can be addressed from the perspective of potential competition. Economists have started to look into vertical and conglomerate mergers which can be analysed from this perspective in the pharma and digital sectors; however, the issue is not restricted to these sectors. Merger policy must deal with two issues as regards such mergers: (1) how to make sure that potentially problematic mergers are notified and investigated; and (2) how to assess the social costs and benefits of such mergers. This paper, available here, looks at both these issues. Second II looks at the theory and evidence of mergers to remove potential competitors. Large firms have been taking over dozens of small technology firms which have not yet marketed their products, or that were at an initial phase of rollout. Such…