Only a few weeks ago, EU Competition Commissioner Vestager said in a speech, “We continue to look carefully at this issue, but we haven’t found a competition [antitrust] problem yet” (see here).  She was referring to antitrust issues arising out of big data, in her words “the huge collections of information that companies can use to understand their environment in a way they never could before.”

Finally, there is a case, not from the European Commission (EC; Vestager’s fiefdom, which deals with antitrust issues EU-wide), but from the German antitrust regulator, the Bundeskartellamt or BKA.  The BKA, perhaps emboldened by representing the EU’s largest economy, is known for pushing the boundaries of antitrust enforcement, so the source is perhaps not too surprising. The target is also not particularly surprising; a large U.S. technology company, Facebook.  However, the type of case, based on infringement of the data protection rules as opposed to “big data” per se, is more surprising.

The BKA, which applies EU and German competition law, announced its investigation into Facebook on March 2, 2016, via a press release, see here.  The BKA is investigating suspicions that, due to its terms and conditions (Ts & Cs) relating to users’ data, Facebook has abused its (possibly) dominant position in the market for social networks.

The BKA’s initial view is that certain of the Ts & Cs violate EU data protection rules. It points out that, while not every infringement of the law on the part of a dominant company is also relevant under competition/antitrust law in the EU and Germany, in this case Facebook’s use of unlawful Ts & Cs could represent an abusive imposition of unfair conditions on users.

The imposition of unfair trading conditions is a well-established example of the abuse of a dominant position under EU and therefore German antitrust law. (Indeed, the basic EU Treaty provision on abuse of dominance refers to this as an example of a prohibited activity.)

But is Facebook dominant (in a relevant market or markets in the EU and/or Germany) in the first place?  Absent this, there can be no abuse and therefore no antitrust infringement as a result of the alleged activity.

On this issue, the BKA stated that it “has indications” that Facebook has a dominant market position in a market for social networks.  This may be difficult for the BKA to establish.  In the EU merger case Facebook/WhatsApp (see here), the EC considered the market for social networking services and left open the boundaries of what is included within this.

However, the EC still analyzed this market and concluded that Facebook faced plenty of competition, stating, “A large number of companies offer online services which include a social networking functionality …. The results of the market investigation indicate that the companies which are most clearly perceived by respondents as providers of social networking services are Facebook, Google+, LinkedIn, Twitter and MySpace.”

Assuming the BKA can show dominance, what about part two of the analysis (i.e., assuming Facebook is dominant, what exactly is the alleged abuse)? 
Continue Reading The Intersection of Big Data and Antitrust Law − Finally a Case in the EU