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Digital single market and "Big Data". Who controls the data?

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Analysis of the GDPR, the new Privacy and Electronic Communications Directive of the European Commission and the consequences of the concentration of big data operators which could allow monopolies and abusive practices

The European Commission appears determined to continue with moves towards a European data economy in the context of the Digital Single Market without this undermining the fundamental right to privacy of European citizens. This has been demonstrated by the adoption of the EU General Data Protection Regulation (which comes into force in May of next year), and the proposal for the new Privacy and Electronic Communications Directive which is expected to be approved this year and which strengthens the requirement for prior consent even for the processing of data generated automatically by electronic devices.

It should be emphasised that the requirement of consent for the use of data known as metadata gives even greater power to the public in the protection of their privacy, as although it is true that this automatically generated data does not identify individuals, used together with personal data it is able provide a great deal of information on members of the public, their behaviour and personality (e.g. location data, time spent visiting websites, types of website visited, etc.).

It is clear that the development of this sector, based on the analysis and mass processing of data ("big data") and with an annual growth rate of 40 per cent according to data for last year, is vital for the present and the future of the European industry and its competitiveness in the global marketplace against third country operators. Hence the European Commission, after the close last April of the period for consultation with operators affected, is immersed in the preparation of draft legislation providing legal and political solutions to promote the data economy and eliminate unnecessary restrictions which impede its growth.

In this process the European institutions seek to achieve a balance between the benefits to companies which use big data and the principles of transparency and public trust, with the public taking an active part in the construction of the industry having been informed of the use of their data in a suitable and transparent manner. These techniques have a number of advantages from the point of view of consumers as their introduction may help to improve the quality of the products on offer, allows personalisation according to tastes, reduces transport costs using nearer locations and improves customer attention and post sale services.

However some voices have been raised, pointing to risks to the rights and interests of the public as consumers which are not at first sight obvious and which have not yet received the attention they deserve.

Concentration of operators with significant databases, with which they market not only their own products but also products in connected markets, is increasingly common. A recent example is the acquisition of WhatsApp by Facebook (on which the European Union has opened penalty proceedings against Facebook for not providing accurate information on the transfer of data between the two services finally carried out). Such concentration of power in a few operators could allow monopolies and abusive practices to the detriment of the rights of consumers and free competition, also preventing the entry of alternative operators.

As has been stated by the German Federal Cartel Office in its recent investigation of Facebook, this operator may have abused its dominant position in the social network market by way of its privacy terms and conditions, which also infringed German data protection rules. Other competition authorities have stressed the possible anti-competitive effects of the use of mass-collected data in advertising campaigns in connected markets and the ability of the owners of these databases to exclude competitors (see the Google case pending before the European Commission).

If it is essential for the public to know the consequences of their giving consent, it is no less essential that such consent be given "freely", i.e. for the public and consumers not to accept the terms and conditions of an operator due to the mere fact of not having alternatives providing the same or similar services. Operators of big data services should not be able to use their market position to impose their terms and conditions, and should be made to compete on an equal basis to obtain the blessing of consumers, and any company wishing to compete should be able to do so on equal terms.

 

For further information, please contact:

Isabel Martínez Moriel

isabel.martinez@andersentaxlegal.es

 

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