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Big Data: Italian Authorities launch joint investigation on Competition and Privacy issues

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11-08-2017

On 30 May 2017, the Italian Competition Authority (ICA), jointly with the Italian Communications Authority (AGCOM) and the Italian Data Protection Authority (IDPA, collectively the Authorities) has opened a joint market investigation (namely, IC53) on the collection of web user data aimed at identifying possible criticalities related to the protection of personal data and the competition aspect in the use of the “Big data” (the Investigation).

With regard to the characteristics of “Big data”, is important to underline that those data are characterized by: (i) the quantity of information they contain (in terms of size); (ii) the continuous updating of that information and the possibility of instant analysis through the use of complex algorithms (in terms of speed); and (iii) the differentiation of their content and formats (in terms of variety).

The Investigation follows closely the report published in May 2016 by the French and the German competition authorities and highlights a high level of attention across the EU regulators towards the ever-increasing role played in our economies by data collection, processing and use.

In this regard, the relevance and the impact of “Big data” have led the Authorities to launch such a wide-ranging investigation with a view to identify criticalities connected the use of “Big data” and to aim at defining a regulatory framework that might promote the protection of personal data, fair competition on the digital market, consumer rights and pluralism in digital ecosystem.

The main goal of the Investigation – as recently stated by the ICA’s General Secretary - is to create an extensive document – whose results may address the European and the Italian legislator in the new regulation framework- aimed at analyzing different aspects related to the “Big data” such as the way companies acquire data and whether they flout any data protection and consumer protection rules.

In other words, the goal of the Investigation is to find out whether data can be valued as an “asset” that builds a dominant position and how to evaluate data during merger review (if, for example, is necessary to evaluate the quantity of big data that is involved in the merger).
In this regard, the ICA’s General Secretary has specified that the Authorities are jointly preparing a preliminary list of companies to whom send requests for information and to invite them for hearings – to be held after the summer break - where the officials from all three Authorities will be present.

The importance and practical impact of this Investigation mainly emerges from the aspects related to the protection of personal data and the protection of competition.

Privacy aspects

With the term “Big data” we generally refer to a “paradigm for enabling the collection, storage, management, analysis and visualization, potentially under real-time constraints, of extensive datasets with heterogeneous characteristics”.

From a privacy perspective, big data include huge amounts of information that is not only personal but however somehow relevant to individuals, that, by means of aggregation, cross analysis and combination each other or with other similar information, can reveal further relevant information also by means of clusters, categories and profiles even if not strictly having a sensitive and judicial character, concerning individuals, their life, health, habits and consuming choices, and so on.

In particular, the personal information that web users provides to online platforms in order to enjoy their services might be employed and processed for marketing purposes. In fact, “Big data” represent a huge information asset and their use creates specific risks for the preservation of users’ privacy given that new technologies and new forms of data analysis in many cases allow to the possible “reverse” identification of the individual through apparently separate and anonymous chunks of data.

The “Big data” analysis, even when information is anonymous and aggregated, can lead to very sophisticated user profiling, and thus allow new forms of discrimination among people, and, more generally, to possible freedom restrictions. This type of data has become essential for stimulating economic growth, for the provision of innovative services, for jobs creation and overall social progress, but at the same time their use might represent an actual threat to users’ privacy.

This brings to the conclusion that “Big data” have an increasing economic value and the same online platforms continuously take into account the value the data create from the users’ personal information.

Antitrust concerns

The main antitrust issues related to the use of Big data is the risk that in the market there would be only few companies owning “Big data” and, as a consequence, those companies may abuse of their relevant market position represented by the set of data they might have collected from their respective users.

One of the issues raised by national competition authorities, including the ICA, concerns the damage that the companies possibly interested – for the purpose of developing their business – in having access to the data (and thus purchasing from the relevant online platform) may incur. Hence in this specific case, the set of data might be of essential relevance for the purpose of the business of this latter companies.

A recent case

In particular, if a dataset is considered unique and “essential” for the business development, the possibly dominant company holding such dataset may be required to grant access to competitors. In this regard, it is worth reminding the December 2016 Microsoft-LinkedIn case; cleared by the European Commission by accepting a set of behavioral commitments from Microsoft with the purpose to protect competition between professional social networks.

More specifically, Microsoft offered a series of behavioral commitments as a remedy, that included the guarantee for PC manufacturers and distributors to freely choose not to install LinkedIn on Windows and the faculty for Windows users to remove LinkedIn in the case PC manufacturers and distributors have decided to pre-install it.

Conclusions

In essence, the Authorities aim to verify whether, and under which circumstances, the access to “Big data” might represent an entry barrier, or in any case facilitate anticompetitive practices that could possibly hinder development and technological progress. The Investigation will focus on the impact of online platforms and the associated algorithms on the competitive dynamics of digital markets, on data protection, on the ability of consumers to choose and on the promotion of information pluralism.

The results of the Investigation will definitely impact on the relevant public and private stakeholders that will appreciate the privacy risks criticalities in terms of restricting or reducing competition.

The Investigation will evidently allow the ICA to evaluate and assess any possible breach of competition law and consequently start a proceeding. In this regard the ICA may request companies to provide information or economic analyses, to submit documents or to hear experts.

For more information contact

Alessandro Greco, Partner
Andrea Zincone, Partner

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