TOTAL: {[ getCartTotalCost() | currencyFilter ]} Update cart for total shopping_basket Checkout

The Privacy Advisor | Vestager on the intersection of data and competition Related reading: A view from DC: White House preps a 'bridge' to AI regulation


“We have to look dangerous.” So said European Competition Commissioner Margrethe Vestager when she sat down to talk the future of data and competition with The Privacy Advisor’s Jennifer Baker at Globsec 2018 in Slovakia. According to media outlets around the world, she is the one government official who keeps tech executives awake at night. The Danish politician and inspiration for the TV series "Borgen" is one of the most recognizable enforcers in the European Commission. In recent years, she has taken on Apple, Google, Facebook and Amazon. Vestager has been unafraid to fine the tech behemoths and order nation-states to undo their sweetheart tax deals. In recent months, prompted, some say, by the Facebook-WhatsApp merger, she has been vocal about the role of data in competition cases.

The Privacy Advisor: What does "good competition" look like to you?

Vestager: Good competition is serving customers well so that we can enjoy affordable prices, choice and also innovation. Because competition is a great driver of innovation. I also think it’s important that if you want to innovate, especially if you’re a small business or a medium-sized business, then you need to be able to trust the marketplace. Trust that you have a fair chance of making it. Because if you find that the bigger guys are above the law — that they can do whatever — then how do you find the courage to invest yourself, your resources, your knowledge into producing something new?

The Privacy Advisor: What always makes the headlines are the cases involving the big tech companies. But because they are predominantly American, you’ve been accused of being anti-American. How do you react to that?

Vestager: I take that very seriously because it’s one of the very fundamentals of our European Union that we put equal treatment into real life. It’s not a theory. It’s not just in our textbook. Equal treatment is not about what flag you’re flying as a company. If you’re a new country of the union or a family member, if you’re a small country or a big country, if you’re private or publicly owned, it doesn’t matter. So, I always take that very seriously. If you look at our work, we do much more enforcement with European companies.

Since we’re in a technological and digital revolution — and I don’t think we have seen it all — these are first steps. They may just be the dress rehearsal for computing and blockchain, etcetera. There will be more and since these are formative years. Of course, there are companies who are first to harvest network effects, marginal costs, etcetera. And, of course, there is a focus on what they’re doing because we are now forming our societies to be digital. 

The Privacy Advisor: You’ve talked about the value of data as a commodity in competition cases. How would that work? Because companies that may be relatively small in terms of employees might still be processing an absolutely enormous amount of data. Obviously, there are a lot of issues around fundamental rights, as well as competition and consumer issues.

Vestager: This is very close to home. When we do a merger procedure, we would look into what role will [data] play. Maybe it’s nothing because the data the two businesses merge is something that you can easily copy, or you can buy or you can create it yourself. But maybe they merge sets of data that will work as a unique source for innovation and a barrier to entry for other businesses in this market. The first situation would give us no concern, the last situation may give us concern.

And this is why we analyze in-depth what role will data play as a resource, as an asset for businesses when they merge. And then, of course, we keep an eye open as to whether privacy can become a competition issue. I think we still have some way to go because the new stronger rules and rights that we have are still new in the making. But one cannot exclude that there will also be an area for competition because you can expect services that will compete under quality of the protection that they can give you as a service or as another business.

The Privacy Advisor: The logical extension of that would be that companies that have amassed too much data and in a position of ridiculous dominance should be broken up. Do you go down the road of saying some companies might need to divest themselves of “data assets”?

Vestager: Well that, of course, is an interesting question: To what degree does size matter in that respect? I think it’s an important discussion, but maybe it’s even more important to discuss how to get access to data. Because now we know that we all own our data. But the thing is that we give very often a royalty-free license for the big companies to use our data almost to whatever. So, for smaller businesses to get access to huge amounts of data, to be able to innovate, to be able to provide services, how can we enable us to give this access since we now own the data? And that I think is sort of the next phase as to figure out how big data can be available also for smaller, medium-sized businesses who are just in the process of getting there.

The Privacy Advisor: A criticism that comes up regularly is the speed with which competition cases move, within the European Commission in particular. When we talk about digitization and the speed of innovation, it’s a world that’s moving incredibly fast. How can even competition keep pace from an enforcement point of view?

Vestager: First of all, we have to look dangerous, because the best thing is that rules are not broken which is a good reason to give out fines that have a sufficient level to be a deterrent. There is one thing though that is inherent in the work we do, and if I may give the parallel: If your house is broken into, it may take five minutes for someone to get in, find valuables, get out. But it will take the police weeks — and the court system months — to find the guilty person, to judge the guilty person. Because we live in the Union, based on the rule of law, and you have the right to defend yourself. And cases should be fully supported by evidence. And that asymmetry in time is of course also our asymmetry. We will never compromise on due process and the right to defend yourself, and our cases should stand up in the court.

Of course, there’s a limit to how fast we can be, that being said. Of course, we should digitalize as well, and we do that. Should we have an algorithm so that we can police the markets to see what the other algorithms are doing out there?

But also, should we have new rules? I have asked three extremely insightful people — one with expertise in economics, one in competition laws, one in tech — to come together and to give advice, and they would give their report by March next year. [They will] look at the future, how to make sure that we make the best marketplace in this digital revolution. And we will also have an open conference by January next year for everyone to come and to offer their perspectives so that we make sure that we also get the right regulatory tools to be able to stay relevant for all the businesses who want to compete by the book. But we need an open market to be able to do that.

photo credit: Radikale Venstre Margrethe Vestager via photopin (license)


If you want to comment on this post, you need to login.