CLIP of the month: CMA and ICO reveal plans to collaborate in digital markets
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On May 19, the UK Competition and Markets Authority (CMA) and the Office of the Information Commissioner (ICO) publishes a joint policy statement expressing their shared views on the relationship between competition and data protection in the digital economy.
The statement from the UK’s competition and data protection authorities – the first of its kind in the world – highlights the similarities between promoting competition in digital markets and protecting people’s data. Presenting the statement, Andrea Cocelli, Chief Executive of CMA said:
“A well-functioning digital market must maintain privacy and offer competitive online services in order to empower consumers. This statement clearly shows that robust data protection can support vigorous competition in digital markets and that digital companies should not use data protection as an excuse for anti-competitive behavior. “
The statement underscores the importance of data in today’s economy and explains how the business models of some of the world’s largest companies rely on data – including personal data – to optimize their products. It is further noted that the policy objectives of promoting competition and protecting personal data are “closely aligned and complementary”, with the synergies between competition and data protection being discussed under three main headings: “User choice and control”; “Standards and regulations for the protection of privacy”; and “data-driven interventions to promote competition”.
The declaration acknowledges that there may be tensions between competition and data protection. It focuses on two main areas:
1. Interferences in data access, which can contribute to a level playing field between competitors, but could also endanger the privacy of users. The statement indicates that if access to personal data is within the scope of a legal remedy to promote competition in a falls in a certain market, this legal remedy must be designed in accordance with data protection regulations. However, the CMA and ICO believe that “any perceived tension can be resolved” by carefully designing data access interventions “to be limited to what is necessary and proportionate”.
2. Risk of anti-competitive interpretation of data protection law. This risk could arise, for example, if companies interpret data protection law in such a way that it interprets internal (group-internal) data transfers more favorably than external (group-external) transfers. The statement said that such an interpretation would be “clearly competitive” as it would provide strong incentives for companies to integrate horizontally and vertically and make it difficult for newcomers to compete in digital markets.
While the CMA and ICO recognize that “there are significant challenges to be addressed that require further scrutiny,” the CMA and ICO confidently conclude that:
“[…] Alleged areas of tension between competition and data protection can be overcome through careful individual consideration, consistent and appropriate application of competition and data protection law and close cooperation between our two organizations. “
This optimistic outlook will be put to the test as government enforcement measures in the digital arena gain momentum.
The CMA and ICO emphasize their commitment to working together on projects that put the joint policy statement into practice. In this context, the declaration relates to the investigation by the CMA into the “Privacy Sandbox” project by Google (on which we have commented here) and the investigation by the ICO into the use of personal data for real-time bids in the adtech industry (see here). The agencies’ commitment to effective collaboration was also confirmed by an updated memorandum of understanding (MoU), signed by the CMA and ICO at the end of April. The MoU lays down a framework for collaboration and information exchange between the two agencies to enable closer collaboration.
The joint declaration of principle and the updated MoU fit into a more comprehensive work program of the Digital Regulatory Cooperation Forum (DRCF), which was founded in July 2020 by the CMA, the ICO and Ofcom. (The Financial Conduct Authority became a full member of the DRCF in April of this year.) Established to “increase the level and scope of collaboration” between agencies and to “address the unique challenges posed by the regulation of online platforms” , the DRCF represents a shift towards a more holistic approach to regulating digital markets in the UK – a shift that is taking place in the EU and beyond.
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