Antitrust

Shearman & Sterling Antitrust Annual Report 2019

Shearman & Sterling LLP

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9 4 Amazon finds itself in an unusual situation of being simultaneously investigated by both a number of national authorities in Europe and the EC for its alleged conduct on its Marketplace, particularly as the national authorities formally announced their investigations after the EC had already commenced its own inquiries. While the BKartA's theory of harm incorporates the use of the Marketplace's allegedly unfair terms and conditions, the EC's investigation is significant as it exclusively focuses on Amazon's unique access to data as platform provider in order to gain an unfair competitive advantage. Commissioner Vestager has admitted that there may be "completely legitimate" reasons for Amazon collecting the data in order to improve the service of its Marketplace for both sellers and buyers. 12 It remains to be seen whether the EC's ongoing investigation will lead to it commencing formal proceedings against Amazon. REGULATING 'DOMINANT' ONLINE PLATFORMS USE OF DATA There is a material risk that technology companies' platforms are deemed to be dominant by a competition authority. In its decision, the BKartA judged Facebook to possess a dominant position in the German social network market, whilst its preliminary investigation against Amazon has found "indications" that Amazon may be dominant in online marketplace services market. 13 A dominant online platform may become subject to additional obligations with regard to the way it uses user/competitor data if such data is deemed to be vital to be able to compete effectively on the platform. Platforms may be required to provide access to such data to its competitors on non-discriminatory terms or they may find that a refusal to provide access to such data may infringe competition law. An example of potentially problematic behavior could be the allegations made by a U.K. Parliamentary Committee that Facebook had threatened to cut off user data to potential rivals, while giving preferential access to app developers that had paid for advertising. 14 Regulators could potentially use such obligations on the use of data as a means of encouraging the sharing of data between market participants in order to stimulate effective competition in the digital economy. However, any such intervention raises delicate questions as to whether data can be seen as truly essential justifying the imposition of a far-reaching access obligation. The various regulatory interventions also indicate that popular technology companies should be careful of the substance as well as the manner in which they impose terms and conditions both on data-rich customers as well as on potential competitors utilizing their platform. The BKartA found that, given Facebook's dominant market position, a mere "obligatory tick on the box to agree to the company's terms' of use" was not sufficient and that Facebook must do more in order obtain effective consent from its joining users. 15 If Facebook fails to do this, it must substantially restrict or cease its data collection in particular from sources outside of the Facebook platform in order to comply with the BKartA's decision. 16 Tighter restrictions on the freedom of technology companies to use data may hamper their ability to generate revenues from advertising and other data-related services, or they may revert to asking consumers for remuneration rather than their data. UNILATERAL CONDUCT 17 T I G H T E R R E S T R I C T I O N S O N T H E F R E E D O M O F T E C H N O L O G Y C O M PA N I E S T O U S E D A T A M A Y H A M P E R T H E I R A B I L I T Y T O G E N E R A T E R E V E N U E S Developments in the Antitrust Enforcement of Online Platforms' Use of Data

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