Digital Markets Act and its implications on the Indian competition law regime – An Analysis from the perspective of Big Data
In recent years, there has been a significant increase in the internet collection of user data in large quantities also referred to as “Big Data". This rise of utilization of Big Data by Big Tech companies that are in the market for providing a variety of internet services - has benefited consumers by increasing the number of free or significantly discounted services, better-quality options, and quick innovation. However, the same holds a continual discourse surrounding the antitrust concerns it poses. The 2016 Federal Trade Commission (FTC) report has inclusively defined big data as a ubiquitous collection of public consumer data from a variety of sources owned by any entity that has access to a large cluster of computers to store such public data infrastructure, generally – Big Tech companies. Antitrust regulators are presently concerned about how such big data is utilized by the digital gatekeepers and the assessment of the anti-competitive practices, it possibly aids in. Currently, we witness the EU enacting the forthcoming legislation, a first-of-its-kind regulation aiming to make the digital market fairer and more competitive, Digital Markets Act (“DMA”) which is scheduled to come into force from September-October 2022.
In India, The Joint Parliamentary Committee recently proposed changes to the Personal Data Protection Bill, 2019 (“PDP Bill”) which does not make an express mention of Big Data. Concomitantly, the CCI has recently proposed to establish a digital market unit ("DMU") to better understand and evaluate the conduct of e-commerce platforms and other digital gatekeepers. This blog will analyze the legal position of regulating Big Data in India, the antitrust concerns it poses and how the proposed changes of regulating Big Data and setting up of DMU by the antitrust regulator may assist the Indian legal system to stay at par with other Data protection authorities by referring to fragments of the Digital Markets Act of the EU.
On the Fence with Big Data
A textbook definition of the same has not been pinned down; it depends on a case-to-case basis. It has been challenging for regulators worldwide to winnow down on one definition of Big Data. However, a definition of Big Data could include large sets of personal or non-personal data that arises from a variety of sources like transaction systems, customer databases, medical records, emails etc., which can be measured, i.e. by utilizing the three V’s - Volume, Velocity and Variety. Mere possession of Big Data by a company is not prima facie anti-competitive. However, gatekeeping the same to foreclose the market and create entry barriers result into competition concerns. Therefore, the collection of Big Data must be limited by data protection authorities.
The PDP Bill proposed to include personal and non-personal data. However, it has no explicit mention of regulating the collection of Big Data. Subsequently, JPC in their findings asserted the economic value of data, as they identified data as an 'asset of national importance' and focused on how imperative it is to 'unify data sets' to enhance innovation. Despite asserting the importance of data protection, the JPC also has overlooked the collection of Big Data which could pose serious data-privacy issues let alone antitrust concerns. It can be argued that Big Data can be read ejusdem generis with the definitions provided under the Bill. However, it cannot be assumed unless specified expressly. Therefore, the absence of any provision to regulate Big Date in India makes it more difficult for regulators to identify its collection, as well as the privacy and anti-competitive concerns that it poses.
The CCI’S approach to Big Data
The abundance of consumer data and the acceleration of technology permits quick data collecting and analysis. Such collection and analysis act as a digital asset, a non-price competitive factor for gatekeepers which is certainly relevant for better disposal of quality services in digital channels - such as social media, search engines, and e-commerce. Big Data allows businesses to make accurate predictions about marketing decisions by accumulating consumer data on a huge scale. Market players are utilizing big data in a variety of industries to provide new products and quality services, raising critical concerns about how the gatekeeping of big data allows the companies to have a greater market power giving them an unfair competitive edge over other competitors who do not have access to it.
Big Data collected by Big Tech companies gives them the market power to gatekeep it and utilize the same to customize their services to their consumer base. This makes it difficult for other players in the market to access the same data as the Big Tech gatekeeper. This not only leads to a foreclosure of the market by the companies owning the dataset but additionally, disincentivizes new entrants to contest in the same relevant market by becoming an entry barrier for them. Both of these concerns lead to appreciable adverse effects/significant impediment and substantial lessening of competition.
Google and its attempt to gate-keep their data
The CCI in the case of Matrimony.com vs Google LLC held that Google was abusing their dominant position by engaging in search bias and by integrating the results from its own vertical search sites with those from its organic search results and altering outcomes in the "online search advertising" market. The Commission in this matter held that the market was a “two-sided” one - such that all the data/information that was gathered from consumers for each search they made on google was added to the "big data" analysis for Google allowing them to enforce their own vertical’ targeted advertising. This was the first time when the Indian competition watchdog came across the usage of big data by a digital keeper giving rise to anti-competitive conduct. In an attempt to examine the potential implications of data protection problems under Competition Law, CCI in its recent paper analyzing the Indian telecom market stated that - “privacy should be recognized as a non-price element in competition law”, which may then be read into the Competition Act, 2002. However, the implementation of the same is awaited. The author in the forthcoming part of the blog will analyze EU’s position on Big Data being used by Big Tech and what the Indian legal system can borrow from it.
The enforcement of the Digital Markets Act
The Digital Markets Act of 2022 (DMA) is certainly a landmark when it comes to digital regulation around the world placing the EU at the forefront. This ex-ante legislation will allow the EU to regulate big-tech companies, also known as the “Digital gatekeepers”, following a pro-active approach to rein in the anti-competitive practices of Big Tech. The concept of a "Digital gatekeeper" is someone who "controls access" to vital online services that enable communication with a wide range of users. In order for business users to compete in a market where these users are consumers, it is required that it controls access to a sizable enough category of users. For instance, many businesses may find it difficult, if not impossible, to compete without the search traffic produced by Google. Such gatekeepers have access to large datasets that helps them cater their services, as much as it is a boon for the player and the consumer, it equally is a ban thereby contravening multiple legislations.
DMA should be viewed as part of the competition policy and so obligations under the act for the largest of the gatekeeper platforms. It would be viewed as a major objective in order to help - both consumer choice and create contestable and fair markets where the value is distributed fairly across all the market players providing a level-playing field. The DMA has included relevant provisions for data protection, as well as keeping a check on antitrust activities enclosed within Recital 71, and 72 r/w Article 14 and 15 - wherein any digital gatekeeper falling within the bounds of “Core Platform Services” under the relevant provision is to strictly comply with the same. In summation, these include notifying the commission under the DMA of any forthcoming acquisition before implementing [Recital 71, Article 14] and providing an independent audit based on which consumer profiling is done.
Conclusion - What can we borrow from the DMA
Primarily, there must be an express identification of Big Data and its collection under the Indian Data Protection Regime; an inclusive definition like the DMA has provided can help the data-protection authority to keep a check on data breaches by Big-tech when they utilize such Big data. Similarly, the proposed DMU which aims to better understand and evaluate the conduct of e-commerce platforms and other digital gatekeepers along with the Data Protection Authority (DPA) proposed under the PDP Bill can refer to the robust compliance requirements under the DMA. Such as an exchange of notifications of acquisitions from the DMU to the DPA; exchange of audit reports vis-a-vis consumer profiling from DPA to DMU - will not only help the two to ensure pro-competitive conduct in Digital Markets but also protect the privacy of consumers’ data in the Digital space.
Alternatively, a similar procedure as the DMA can be adopted wherein a separate authority governing digital markets could harmoniously work with the DPA, making the process of governing the digital market more effective. Either way, regulating authorities will be able to efficiently assess and control big tech behaviour providing for a much more adept legal system in the niche of digital markets. However, the delayed implementation of Data Privacy Laws and Competition Laws with respect to the digital market slows down our legal system; It must be expedited as we see an upward curve with big tech concerns.