The European Union is considering whether the way large Internet companies, such as Alphabet Inc.’s Google or Facebook Inc., collect vast quantities of data is in breach of antitrust rules, the bloc’s competition chief said Sunday.
“If a company’s use of data is so bad for competition that it outweighs the benefits, we may have to step in to restore a level playing field,” said Margrethe Vestager, European Commissioner for Competition, according to a text of her speech delivered at the Digital Life Design conference in Munich, Germany.
“We continue to look carefully at this issue,” she said, adding that while no competition problems have yet been found in this area, “this certainly doesn’t mean we never will” find them in the future.
Her comments highlight the increased focus that regulators give to the use of so-called big data—large sets of personal information that are increasingly important for digital businesses, even though people generally hand over the information voluntarily when they use free services.
The data can help firms target ways to make business operations more efficient. Companies increasingly are also collecting more data as a greater range of devices—from fitness trackers, smoke detectors to home-heating meters—are being connected to the Web, a phenomenon known as the “Internet of Things.”
“But if just a few companies control the data you need to satisfy customers and cut costs, that could give them the power to drive their rivals out of the market,” Ms. Vestager said.
The concern is that huge data sets compiled by large Internet firms could give these companies an unfair advantage by essentially erecting barriers to new competition, some experts say. Incumbent firms would amass detailed profiles of their consumers that would allow them to target advertising with precision, while new rivals could find themselves too far behind to compete.
This isn’t the first time Ms. Vestager has expressed interest into how companies use big data. On Sunday, she laid out some details about how the European Commission is looking into the issue.
Ms. Vestager said the commission would be careful to differentiate between different types of data, since some forms of information can become obsolete quickly, making concerns of market dominance moot.
She also said the EU would look into why some companies can’t acquire information that is as useful as the data that other competing firms have.
“What’s to stop them [companies] from collecting the same data from their customers, or buying it from a data-analytics company?” she said.
Lawyers representing U.S. tech firms have said previously that competition concerns over data are misguided. They said data isn’t exclusive since many different companies can hold the same information on people’s names, addresses and credit-card details, for example. It is also easy for consumers to switch between platforms, they said.
As for how companies protect their consumers’ data, Ms. Vestager said that was beyond her scope and pointed to the new EU-wide data-privacy rules agreed late last year.
Ms. Vestager also said she would publish a preliminary report in the middle of the year, as the next formal step in an investigation into whether Internet commerce companies, such as Amazon.com Inc., are violating antitrust rules by restricting cross-border trade.
“With so much at stake, we need to act quickly when we discover problems,” she said, in reference to business contracts that aim to keep national markets separate.
To start that debate, the commissioner said she would publish a paper before Easter outlining the views of relevant parties affected or involved in geo-blocking, a practice to discriminate via price or the range of goods a company offers based on a customer’s location.
The commission in September launched a public questionnaire to gather more information about the practice of geo-blocking.
Source: The Wall Street Journal