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Big Data and Competition Law

Courtesy/By: Debojeet Das | 2020-06-06 18:02     Views : 395

This is the age of information. Undeniably, the technological boom in the post-90s era in the developing countries has made information as the new currency. Technological advancements have made collection, processing and analysing data much more convenient than it was even a decade ago. This has allowed corporations to exploit large volumes of information to their advantage to sell what sells most to the consumer in ways that the common consumer is still oblivious to. This collection of big data and using such big data to mould the market in unprecedented ways has been pushing competition law regulators to answer the question: whether the collection of big data can influence markets in a way that competition laws try to avoid. Before we go forward with the drawbacks that the competition regulators are considering big data, we need to understand why the use of big data has come to the fore in recent years. 

The influence of big data

A search engine like Google that runs on artificial intelligence that learns computer algorithms which can observe, analyse and record the usage of search terms, the website's users visit the most, the kind of emails they put to spam, the sort of products they look for when they look for and more to create tailor-made user profiles. These search engines earn their big bucks by selling these individual data sets collected from these customized user profiles to big corporations and retailers who can help sell their products through selective advertisements. It improves the decision-making of businesses when they are in limbo concerning the targeting of their products. Big data, quite literally, allows businesses to customize and spoon feed the most suitable product information to the customer based on the kind of keywords used, their search history and the kind of pages they follow and the posts they like. What it means is, that it aids these businesses and corporations to study consumer demand patterns enabling them to improve their supply chain. Competition law regulators though are concerned with the investment that is required to analyse or even buy such large sets of data in the first place. Due to the extremely valuable nature of consumer data, it requires immensely heavy investments towards the acquisition of data and information. This gives rise to a natural and legitimate concern of big companies with big bank accounts dominating the market because of the better availability of data sets. This can set an exceptionally high entry barrier. 

Steps Taken

Similar to this issue, experts raised the issue of consumer privacy becoming a relevant non-price barometer of competition assessment. Following the merger of Microsoft and LinkedIn, the European Commission raised an issue regarding this aspect. Privacy concerns were seen as a non-price competition ingredient which could influence consumer perception towards the quality of services offered. The European Commission has earned a reputation to come up with austere regulatory decisions and it did so again when it imposed a fine of $132 million on Facebook for essentially hiding the fact that after it acquired the messenger app ‘Whatsapp’, it would enable Facebook to automated linking between Facebook and Whatsapp accounts. It is clear by now that whoever controls the flow of information, controls the world but what is to be seen yet, is how legislators react to this change. 

Courtesy/By: Debojeet Das | 2020-06-06 18:02