Who: European Data Protection Supervisor (EDPS)
When: 26 March 2014
Law stated as at: 13 May 2014
Peter Hustinx, EDPS, published a Preliminary Opinion on Privacy and competitiveness in the age of big data. It is sub titled “The interplay between data protection, competition law and consumer protection in the Digital Economy” (the Opinion).
The Opinion states that the collection and control of massive amounts of personal data are a source of market power for the biggest players in the global market for internet services and personal information has become a form of currency to pay for so-called ‘free’ online services and hence a valuable intangible asset for an increasing number of companies doing business in the EU.
The Opinion continues that there is a need for investigation into the costs and benefits of these exchanges for both consumers and businesses and calls for closer interaction between different regulators and policy experts to “stimulate the market for privacy-enhancing services” and aid the enforcement of rules on competition and consumer protection. The Opinion notes that although consumers are becoming more “tech savvy” they appear to be unaware or unconcerned about the degree of intrusiveness.
The EDPS notes that the EU rules in these policy areas have much in common: each aims to promote growth and innovation and to promote the welfare of individual consumers. The Opinion continues:
“The evolution of big data has exposed gaps in EU competition, consumer protection and data protection policies that do not seem to have kept up with this development. Smarter interaction across these partially overlapping policy areas will support growth and innovation and minimise the potential harm to consumers. The EDPS is pleased to be facilitating discussions between regulators and experts in these fields.”
The Opinion also includes in an annex a comparative overview of the different requirements in Data Protection, Competition and Consumer protection including scope, transparency and choice, sanctions and prevention of harm.
Convergences and tensions
Also examined are some of the convergences and tensions in these areas of EU law against the evolution of big data including:
(a) the need for a fuller understanding of the massive growth in services that are marketed as free but in effect require payment in the form of the personal information of their customers;
(b) the need for a definition of consumer harm in the enforcement of competition rules, in markets where powerful players may refuse access to personal information and may apply confusing privacy policies;
(c) the need for increased transparency from companies in their use of data and the true value of the personal information they collect;
(d) the need for a reduction in the retention periods for data and increased options for individuals to delete data e.g. by providing a “clear-my-data” button;
(e) the potential that if firms collaborate in the adoption of certification schemes guaranteeing a high standard of privacy that they may be exempted from the prohibition of anti-competitive agreements;
(f) the need for effective guidance on the application of privacy, competition and consumer protection rules for online services;
(g) increased co-operation between regulators in investigation and enforcement;
(h) the need for the fostering of privacy as a competitive advantage where a failure to respect privacy would damage market power;
(i) an increase in data portability which will also increase competition;
(j) a review of competition legislation for digital markets; and
(k) personal data use should be considered as part of the appraisal of mergers, including the impact on users where databases are merged.
Why this matters:
Traditionally the Regulators in this area have tended to operate separately, although we have started to see some overlaps in recent years e.g. OFT interest in data driven pricing and online advertising.
This Opinion highlights the growing regulatory interest in this area and their concerns over the trading of data in return for services and whether services are really “free”. Linked with this we are starting to see more consumer interest in this area and recognition by customers of the value of data. A student recently set up an auction for his “personal data” online “to draw attention to this issue and there is growing consumer concern over use of data and the need for transparency, as seen with concerns raised over proposed sharing of care and tax data.
The EDPS is looking to open the discussion and the Opinion is intended to help inform and stimulate debate on the application of EU rules. Subsequent discussions may clarify the need for specific policy responses, which might be the subject of a further Opinion. The EDPS will facilitate discussions among experts and practitioners from the EU and the US, including a workshop in Brussels on 2 June 2014. What is clear is there will continue to be more regulatory interest in this area and increased regulation.