Data Protection Considerations in EU Competition Law: Funnel or Straightjacket for Innovation?

P. Nihoul and P. Van Cleynenbreugel, The Role of Innovation in Competition Analysis (Edward Elgar, 2018 Forthcoming)

55 Pages Posted: 26 Apr 2018 Last revised: 23 Sep 2018

See all articles by Nicolo Zingales

Nicolo Zingales

University of Sussex Law School; Tilburg Law and Economics Center (TILEC); Tilburg University - Tilburg Institute for Law, Technology, and Society (TILT); Stanford University - Stanford Law School Center for Internet and Society

Date Written: June 30, 2016

Abstract

As technological advancement dramatically increases the opportunities and reduces the costs for data collection and processing, a variety of undertakings have been seizing those opportunities to offer more targeted products or services. The pattern is simple: data on consumer identities, preferences and behavior is collected from a variety of sources and collated into comprehensive databases, which are then used to identify relevant consumer characteristics and enable a better targeting. The potential of garnering and using data to improve productivity and customization is indeed a central promise of the so called “big data revolution”, which tends to favor actors with greater capacity to collect, retain and analyze consumer data. In this context, where data constitutes a valuable input for the attainment of efficiencies and drives competitive dynamics, competition law inevitably complements data protection law as an instrument to prevent entities with access to strategic datasets to abuse their position to the detriment of consumers, and individuals more generally.

Needless to say, these instruments differ significantly in their goals and methods of operation. Most importantly for purposes of this chapter, their differences are significant when it comes to the evaluation of the legal justifications offered by undertakings for a range of actions they take in relation to those datasets. A comparison of the legal tests applied in these two different areas in the EU illustrates two contrasting approaches to the incorporation of innovation into legal analysis, with important consequences for competition enforcement. The significance of those differences implies that great caution should be exercised in the implementation of rising “integrationist” theories of data protection and competition law. This chapter exposes a blind spot in that emerging integrationist trend, suggesting that the process used to collapse competition and data protection assessments has consequential implications for the treatment of “data-driven innovation” and “data protection innovation”. Recognizing that the fundamental right to data protection cannot be ignored by competition enforcers, it calls for the definition of a framework of cooperation between competition and data protection authorities.

Keywords: Antitrust; Data Protection; Innovation

Suggested Citation

Zingales, Nicolo, Data Protection Considerations in EU Competition Law: Funnel or Straightjacket for Innovation? (June 30, 2016). P. Nihoul and P. Van Cleynenbreugel, The Role of Innovation in Competition Analysis (Edward Elgar, 2018 Forthcoming). Available at SSRN: https://ssrn.com/abstract=3158008 or http://dx.doi.org/10.2139/ssrn.3158008

Nicolo Zingales (Contact Author)

University of Sussex Law School ( email )

Falmer
Brighton BN1 9QN
United Kingdom

Tilburg Law and Economics Center (TILEC) ( email )

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Tilburg University - Tilburg Institute for Law, Technology, and Society (TILT) ( email )

P.O.Box 90153
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Tilburg, 5037
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Stanford University - Stanford Law School Center for Internet and Society ( email )

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Stanford, CA 94305-8610
United States

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