CCI Trying to Broaden its Ambit: Data Protection under Competition Law?
Author: Umang Motiyani
5th year student at ILS Law College, Pune
The Competition Commission of India ("CCI") is responsible for the enforcement of competition law in India. Established under the Competition Act, 2002 ("the Act"), CCI has a responsibility to prevent any practice that will have an appreciable adverse effect on the competition in a given market.
II. Vinod Kumar Gupta v WhatsApp
In this case, the CCI concluded that "the market for instant messaging services using consumer communication apps through smartphones in India" was the relevant market. The complaint alleged that WhatsApp was abusing its dominant position in the relevant market by compelling users to share their account details and other information with Facebook, claiming it would result in better and improved online advertisement and product experiences available on user’s Facebook pages.
However, in this case, the CCI issued an order against any prima facie case of contravention of provisions of Section 4 of the Act since a 30 days opt-out period was granted to users who did not wish to share their data with Facebook. The order also concluded that infringement of a right to privacy or breach of the Information Technology Act, 2000 (“IT Act”) does not fall within the jurisdiction of the CCI.
III. CCI’s Suo Moto Case
IV. International Perspective
A. European Union
Additionally, in February 2019, Germany’s Federal Cartel Office ("FCO") issued a decision against Facebook for abusing its dominant position in the market of social networking platforms. The FCO observed that Facebook was collecting user’s data from their wholly-owned companies (like WhatsApp and Instagram) and other third-party sources, as a mandatory condition to use its platform. Thus, Facebook was prohibited from combining any user data without voluntary consent from the FCO that would help them create a unique database and gain further market power.
The FCO’s approach, where they recognised data as an asset, was questioned by the national court following an appeal by Facebook. The court rejected the notion that violation of data protection law can automatically entail a violation of competition law. It recognised that, despite an attempt to deal with concerns of growing digital market problems, the FCO’s competence did not include data protection.
B. The United States
V. Critical Analysis
Although one cannot deny the anti-competitive aspects of the collection of data by dominant players of the market, a distinction between privacy and competition laws must be observed. Similar to EU and US conclusions, competition laws cannot be applied where it relates to secondary criteria. As discussed by the Supreme Court of India in CCI vs Bharti Airtel Limited and Others, the agency with primary jurisdiction should regulate matters.
Since the CCI has introduced the importance of non-price factors (like privacy) driving competition in its recently released report on “Market Study on the Telecom Sector in India” the overlap with other laws will increase. However, if a non-competition regulatory authority with specialised jurisdiction can solve the problem of anti-competitive practice as well, the CCI should take a back seat. Here, inspiration can be taken from EU’s Four Vs’– variety of data, velocity at which the data is collected, volume and value of the data collected – a qualitative rather than quantitative approach. This approach helps to examine whether the data sets have the potential to create an undue advantage for the entities acquiring them.
In the growing digital communications market, which primarily expands on data aggregation, the CCI can conclude that the dominant player in the market should not be allowed to deprive the consumer of the right to ‘freely consent’ to the use of their data. It can prevent discriminatory access to accumulated data, especially by major market players, which can raise concerns of barriers against new entrants or even existing rivals in the market, and hinder their reach to consumers. Accordingly, the CCI will be able to analyse whether there is an appreciable adverse effect on the competition in a given market.
Thus, we conclude that competition law in India covers privacy concerns along with the impact of dominant players in maintaining competitive markets, especially for technology and data-intensive companies.