Competition Law, Privacy and Fairness – Comment on a Possible Intersection

1. Introduction

Competition law, privacy and fairness are three important areas of regulation that play a crucial role in shaping the modern digital economy. In this blog post, I explore the key concepts and principles of competition law, privacy and fairness. I discuss their importance in the digital age and how they can help to create a more transparent, equitable, and sustainable digital economy. Whether you are a business owner, a consumer, or simply interested in the future of the digital world, this post will provide valuable insights into the role of regulation in shaping the digital landscape and the potential benefits of a well-regulated marketplace.

2. Defining fairness

Defining fairness is a laborious task, with a different concept of fairness recognisable in the context of different areas of law. The concept of fairness is shared in legislative objectives of both competition law and data privacy law.^[1] Data protection law is interested more in the fairness of data processing rather than fairness in competition processes.^[2] Vestager contributed to an increased interested for fairness in the digital policy disclosed underpinning enforcement of competition law. The notion of 'fairness' is referred to in the preamble of the Treaty on the Functioning of the European Union (TFEU). However, its notion has been often overlooked by more technical considerations on the concepts of welfare, efficiencies and competition harm. In the view of the European Commission, competition law is not only striving for classic economic efficiency goals, such as "better quality goods and services at lower prices", but it also aims to "apply rules to make sure companies compete fairly with each other.”^[3] Hence, the conference of fairness in competition law policies should not overshadow the existing rigorous, evidence-based analysis of each particular case, and that fairness should not act as an operational concept. Instead, fairness should be translated into more specific tests underpinned by competition law and economic considerations of each case.

3. Fairness and privacy

Due to the abstract nature of fairness, the concept of fairness should serve as a guide, and not an enforcement benchmark. Fairness might be entwined in the competitive process, and somehow guide the enforcement, reflecting on the consumer welfare and efficiency interpretation.^[4]

Although the concept of fairness acts as an abstract phenomenon for the existing competition tools, fairness might be decisive in the digital economy sphere, as its abstract norm guides the relationship between online platforms, consumers, and service providers. Fairness appears to demonstrate a multisided nature as supporting interventions of unfair market practices, discriminatory practices, and allows to justify intervention when misleading information leads to or facilitates distortion of competition.^[5] Arguably, this broad scope of fairness could also encompass data handling or privacy violation which could harm competition and play an important role when asymmetric information distorts competition.

By considering the notion of fairness, a large data acquisition could threaten fundamental civil rights and impact on the ability to participate in political life, leading to discrimination.^[6]

In the respect of the competition law enforcement, the focus could be shifted to consider the connection with several competitors on the market, and impact on the consumer welfare. In the consideration of privacy-related concerns, the assessment is likely to consider different elements that adversity affects consumers in making a reasonable choice. It is nevertheless apparent that privacy concerns might be way behind the remits of the conventional competition law assessment as focusing on quality and innovation. For example, in Facebook/WhatsApp,^[7] the European Commission asserted that privacy policies serve as a non-monetary factor in competition: any deterioration in privacy policies can impact product quality or potentially lead to an increase in the product's price.^[8] Equally, while the absence of compliance with the General Data Protection Regulation (GDPR) cannot singularly determine the legality of conduct under Articles 102 of the TFEU, it is crucial to understand that adherence to GDPR alone does not validate or justify conformity with competition law. Put differently, non-compliance with GDPR does not automatically indicate a violation of competition rules.^[9] Conversely, a dominant undertaking's compliance with GDPR does not guarantee immunity from violating competition law. The assessment of the lawfulness of a given conduct requires an independent evaluation of both GDPR and competition law considerations. The interpretation offered by Advocate General Rantos in Meta Platforms regarding the incidental analysis of data privacy law in the assessment of competition law may bring clarity to the matter by outlining clear concepts on the interaction between these two legal fields. This point was shared by the Court of Justice of the European Union (CJEU).^[10]

4. Could fairness solve the privacy-problem?

Reflecting on the above discussion, I assume that including the distributional goal of fairness could open the door to consider broader factors in exploitative abuses, such as privacy. Although the content of fairness is potentially relevant in the privacy breach assessment by focusing on achieving a desirable outcome in the protection of competition structure, fairness is a competition law’s procedural matter and should not be focused extensively on the analysis of the competition law enforcement. The proof for this proposition is that competition law could become superfluous if focused on the surplus' allocation rather than focusing on the process of allocation of resources. Additionally, even if competition law aims at the fair allocation of resources, it does not mean that all economic actors should be placed in the same position in particular transactions, but the fairness of equal opportunities to participate in the market should be offered. Yet, the fairness might not be a decisive normative standard of competition law, and its idea could only focus on fair wealth distribution. However, such a notion might be seen as being beyond the scope of competition law enforcement and different policies might be more suitable to achieve fairness. Hence, fairness should not be seen as a weapon to ensure that consumers are protected against a violent undertaking, the protection of individuals' rights as consumers and market participants is already guaranteed by the relevant authorities overseeing data protection and consumer protection.^[11]

Arguably, a direct correlation may exist between the dominant position of major digital entities and potential unfair practices leading to infringements on competition, adversely affecting price, quality, and innovation. This could create an imbalance in bargaining power, with gatekeepers gaining an advantage over business users that exceeds the value provided by the gatekeeper's services. This approach assumes a consideration of the distribution of created value, framing fairness in the following ways:

• Unfair and exploitative practices driven by the economic power of gatekeepers may result in various adverse effects, emphasizing the need to safeguard users against the negative economic influence of gatekeepers.
• Fairness may involve transparency to counter misleading practices that exploit end-users, including biased consent architecture.
• The autonomy of users and businesses could be compromised, impacting choice architecture, the freedom to compete, and the exploitation of personal data.

5. Conclusion

The negative effects of gatekeepers' economic power can result in unfair and exploitative practices, which can have serious consequences for both users and businesses. It is essential to protect against such practices by ensuring transparency and preventing misleading tactics, such as biased consent architecture. The autonomy of users and businesses can also be impacted, leading to limited choices and a lack of freedom to compete. Additionally, gatekeepers' exploitation of personal data can further exacerbate these issues. Therefore, it is crucial to prioritise fairness, transparency, and autonomy when it comes to regulating large digital undertakings in the marketplace to create a more equitable and sustainable economic system.

^[1] J Cremer, Y de Montjoye and H Schweitzer, ‘Competition policy for the digital era’ (European Commission 2019) 30 < https://data.europa.eu/doi/10.2763/407537>; UK Government, 'Report of the Digital Competition Expert Panel, Unlocking Digital Competition' (March 2019) <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/785547/unlocking_digital_competition_furman_review_web.pdf>

^[2] B Kira, V Since, and S Srinivasan, 'Regulating digital ecosystems: bridging the gap between competition policy and data protection' [2021] Industrial and Corporate Change 1337

^[3] Communication from the Commission — Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings (Text with EEA relevance) OJ C 45, 24.2.2009

^[4] Case 27/76 United Brands v Commission [1978] ECR 207; Case C-177/16 Autortiesību un komunicēšanās konsultāciju aģentūra (AKKA)/ Latvijas Autoru apvienība (LAA) [2017] ECLI; Deutsche Post AG (Case COMP/C-1/36.915) Commission Decision 2001/892/EC [2001] OJ L331/40.

^[5] Case C-209/10 Post Danmark A/S v Konkurrencerådet ECLI:EU:C:2012:172, para 21: Article 102 does not ‘seek to ensure that competitors less efficient than the undertaking with the dominant position should remain on the market.’

^[6] F Bosco, N Creemers, V Ferasaris, D Guagnin & B Koops ‘Profiling: A persistent core issue of Data Protection and Privacy’ in S Gutwirth, R Leenes & P de Hert (eds) Reforming European Data Protection Law (Springer 2015) 10, 50.

^[7] Facebook/WhatsApp (Case No COMP/M.7217) Commission Decision [2014] OJ C417/4, para 164

^[8] A Gorecka, 'A confusing relationship between privacy and competition law — a way forward for EU competition law and algorithms pricing’ [2020] Indian Journal of AI and Law 7.

^[9] Case C-252/21, Meta Platforms and Others

^[10] Case C-252/21, Meta Platforms and Others; Case C-252/21, Request for a preliminary ruling, Meta Platforms and Others (Conditions générales d’utilisation d’un réseau social) ECLI:EU: C:2022:704, Opinion of AG Rantos, para 23.

^[11] Arletta Gorecka, ‘Is "Privacy" a Means to Protect the Competition or Advance Objectives of Innovation and Consumer Welfare?’ in Maria Tzanou (ed) Personal Data Protection and Legal Developments in the European Union (IGI Global 2020), 119.