Chapter 6: The Way Forward

The discussion here is more political than the normative competition law analysis throughout the research. Still, it is necessary to determine an approach, either an interventionist or a passive one. For instance, the laissez-faire ideology 1 of neoclassical economics suggests that market players should set the level of competition in time, and intervention outside the market would not benefit consumers. In other words, markets will correct themselves in time, and the best approach is not to intervene in more or less competitive markets. Academics who argue that markets self-correct also tend to argue that competition law is flexible enough for the application of Article 102 in data-driven markets since it is well-equipped enough. 2

The application of laissez-faire economics (and a consumer welfare approach) has become more evident in EU law due to a more economical approach to the competition policy, especially after the 1980s. However, long before its rise in European law, the progress of consumer welfare can be traced in the US conduct as far as a century ago. First, Harvard and then the Chicago School of competition set the framework for the consumer welfare approach to competition. According to the ideology, competition law specifically concerns consumers and their interests. As Richard Posner indicates, at that time, the Chicago School of competition did not contain a well-rounded philosophy of competition. 3 Instead, it was more of a response to the specific problems encountered in several competition cases. 4

From a different point of view, Robert Bork, a prominent scholar of the Chicago School, argues that competition law should not determine who controls the wealth – in other words, who should be rich or poor – or deal with expenditures on environmental issues such as pollution. 5 Instead, competition law and policy should focus on ensuring conditions which would be the most favourable to consumers. 6 Thus, competition law should take efficiencies 7 into account and then assess the consumers’ welfare, which must be the main concern of competition policy. 8 Since then, the consumer welfare approach has been accepted as the main application of competition law in US antitrust law. Even the court decisions of that era have interpreted the Sherman Act’s (1890) real intention, referring to Robert Bork’s 1978 work, to prescribe the consumer welfare approach for federal antitrust law. 9

In the US, strict laissez-faire ideas have influenced enforcement in data-driven markets. In the wake of the new economy, many competition proceedings (abusive behaviour cases and mergers investigations) were held before the United States courts and the FTC. Microsoft’s 10 abuse of a dominant position case is a good example of concerns raised regarding possible intervention by competition authorities in the new economy markets. 11 Due to its dynamic and fast-moving character, a passive approach was found to be more appropriate in order not to stifle innovation. Later, in the Google Search case, similar ideas were also discussed. 12 The non-interventionist approach relies on the idea that many more start-ups will be ready to challenge incumbent technology giants since innovation is favoured by allowing “self-regulation”. 13 However, the passive approach definitely created monopolies or at least high concentrations in data-driven markets, and incumbents became more and more dominant. 14 Moreover, through “killer acquisitions”, even a few remaining start-ups and innovations are already being swallowed up or thrown away by incumbent technology giants.

To sum up, it has been well over two decades since the emergence of data-driven markets, and all findings demonstrate that the dominance of incumbents is getting stronger and markets are tipping due to the data power of a few strong dominant undertakings, as new markets are also being created in the online world. Even though the Chicago School of competition has a loud voice on the other side of the Atlantic, the approach to technology giants and data-driven markets is starting to change. On 29 July 2020, the US House of Representatives’ antitrust subcommittee held a hearing regarding the anti-competitive behaviour of Big Data user technology giants. 15 Apple’s CEO Tim Cook, Google’s CEO Sundar Pichai, Facebook’s CEO Mark Zuckerberg and Amazon’s CEO Jeff Bezos were summoned to the hearing. Democratic members of the House Judiciary subcommittee, including David Cicilline (Chair), Pramilla Jayapal, Val Demings and others, pressured CEOs to reveal how the technology giants channel their data into market power and abuse their powers after “killer acquisitions”. Jeff Bezos, Mark Zuckerberg and Sundar Pichai struggled to convince the committee that their business strategies had been for innovation and better products for consumers rather than creating a digital empire to rule the online world. 16 Although Apple’s Tim Cook positioned his company differently, there are strong concerns about whether Apple is also engaging in abusive behaviour through its App Store in iOS, macOS and Apple Music.

In October 2020, the staff of the Democratic members of the Committee signed a 400-page report on how technology giants abuse their Big Data power, impede competition and stifle innovation. 17 According to the study, technology giants engage in anti-competitive conduct and become “internet gatekeepers” by controlling online markets that are crucial for consumers. By this means, they entrench their market power, pursue start-up acquisitions and eventually monopolise. The study suggests potential regulatory ex-ante interventions in data-driven markets by breaking up technology giants into smaller companies. Likewise, Joe Biden, the Democratic president of the US, stresses that he would consider company breakups in the near future. 18 The approaches of US lawmakers and politicians are changing due to the power shift between Republicans and Democrats. Apart from the political movements, the judiciary and authorities also seem concerned regarding data controllers violating antitrust laws and exercising monopolistic powers in the online world. This can be traced in the FTC’s newest investigations in data-driven markets against Google, Amazon and Facebook. 19 Thus, even in the US, calls for intervention are getting even more serious than in the past.

Another argument against the competition law intervention in data-driven markets is the data protection and privacy argument discussed in Chapter 5. To nuance it briefly, data violations are found to be a grey zone between data privacy, competition law and consumer protection. Therefore, the increasing use of consumer data and Big Data utilisation will likely cause competition and privacy concerns in the future. As there is an interplay between different areas of law, cooperation is needed while approaching these competition violations. Therefore, the idea of creating a reliable and effective system for data protection, like the new GDPR, to deal with data-related issues and enable innovation and competition is also discussed widely. However, as mentioned before, when a data violation constitutes abusive behaviour related to market power, data protection issues become an internal issue for competition law. 20 Thus, it becomes even more important while addressing potential novel abuse types in the new economy.

The recent Bundeskartellamt decision addressing data privacy violations as a competition issue has revealed the potential impact of data power on consumers, online markets, and undertakings. Therefore, there is a need for competition authorities to better examine how data is collected and utilised in the online world in terms of competition law. 21 The decision has also revealed the importance of data privacy in the competition law assessment as a potential parameter, so competition law should not be left outside the discussion. In other words, competition and data protection authorities should handle privacy and data protection considerations together. The connection between the lawmakers and enforcers must be strong as the Bundeskartellamt’s recent decision successfully identified and addressed the need during the investigation by cooperating with the German data protection institutions.

To sum up, a non-interventionist approach does not seem to be right for competition law issues in the related markets. As can be seen from the recent merger investigations in the EU and the US, 22 the competition authorities were reluctant to intervene in digital ecosystems, and they deduced the idea that competition between technology companies would become more stable. The l...