Should competition law incorporate data protection concerns? If so, how might the consumer welfare standard incorporate these concerns?
Yes, the competition law should incorporate concerns related to data protection. Competition can include invasion in market share and corresponding dominance in the market.
While competition law can make fair judgement on assessing a merger move, we need to ensure that the fair values are compared. Entities involved should be considered not only for the economic impact they create in market – but also the impact of the value of data associated.
Free-service provision makes a company like Google already protected to a good extent. In this case, the companies fall under completely different market segments, making it almost pass through competition rules. Impact of data and the influence of algorithmic derivations of these data can create a complete imbalance. This means that the merger of A & B is different from the merger of C & D even when each of them are from a comparable market and financial positioning and similar economic impact. The attribute of data is missing.
Most current regulations on competition are primarily made on traditional market approach. But, regulations like the GDPR have started making a difference by pushing technology and data induced variables into the assessment processes.
Look at the acquisition of Starwood by Marriott – example from traditional approach. They come from the same industry and provoke creation of a monopoly. Data was never discussed on their acquisition process - the discussion was only the impact on the hospitality sector.
The consumer welfare standard should contain data aspects as an attribute to determine the fair value of the merging entity. Again, the post-merger combined strength of the data should be predictably evaluated through certain benchmarking process before any merger is approved.
Google controls 90% of the targeted online advertisement market. Monopoly is not a crime, but an ideally desired positioning by any investor. Giving all respect to this, the policy makers should consider this acquisition attempt as a good study case in preparing key indicators to measure impacts of merger, doing all due diligence to consider data protection and abuse aspects.
Is the incorporation of data considerations into merger decisions consistent with the recent trends in merger rulings?
Data considerations in merger decisions cannot be clearly said as consistent if we consider the trends in historical rulings in this regard. However, this is an area that is “adventurously innovative” with growing technological advancements and it should be an evolving subject. Google has been repeatedly confirming their stand on data policy, in various earlier occasions.
Google VP Rick Osterloh said on the merger with health tracker Fitbit, “This deal is about devices, not data. We’ve been clear from the beginning that we will not use Fitbit health and wellness data for Google ads.” And we still discuss this matter of concern. This means that consideration of data, though important, has not been sufficient to specifically address the matter as points of law.
Digital dominance has got more attributes to measure than traditional market dominances. Every future ruling will be a litmus test on assessing how well we faired in the race for considering data.
Is this change to merger analysis necessary to ensure effective data protection?
Change is necessary to ensure effective data protection. However, we should understand that the regulatory changes are evolving. To contain acts that potentially result in exploitative and/or abusive practices, policy makers need to work with technocrats and market-watchers to gauge the impact and derive a measurable criterion that a law can review.
A single, private organisation like Google is getting too much personal information and becoming powerful. Another important aspect is how to derive a regulatory control for such invasions.