Do data generated by connected cars raise antitrust risks?

In these days the European Commission is particularly active in understanding the possible antitrust impact of data-related conducts. In particular, from a recent policy document published by the Commission and from statements released by DG Comp´s official, it emerges that data generated by automated and connected cars might be considered an “essential facility” from a competition law perspective, at least in the early stage of the industry development, with the consequence that access to these data could not be refused to third parties. Consequently, manufacturers of automated and connected cars which refuse to license these data under fair terms to providers of cars-related services (i.e.: insurers, repairers, leasing companies) might be in breach of article 102 TFEU.

Commission´s concerns arise from the circumstance that automated and connected vehicles will generate a large amount of data that could be shared through communication devices. These data have an enormous potential to create new and personalised services and products (targeted advertising, better understanding of drivers´needs) and to revolutionise existing business models (e.g. roadside assistance, vehicle insurance, vehicle repair, car rental, etc.). Different economic actors are competing for such data. Vehicle manufacturers or digital platforms have a privileged access to car data and to vehicle resources, such as the possibility to propose services directly to the driver by using the vehicle dashboard.

The European institutions are not standing still on this issue. The European Parliament called upon the Commission to publish a legislative proposal that ensures a level playing field on access to in-vehicle data and resources. The Commission itself has published further guidance on the business-to-business and business- to-government exchange of data. However, in the absence of a regulatory framework, the Commission seems determined to consider further options in order to enable fair competition in the provision of services in the digital single market.

In a conference held in Brussels on June 26, a head of unit of DG Comp was reported to state that the Commission will keep an eye on a situation where a limited number of players have privileged access to key inputs, for example data, and that lawyers and economists within DG Comp are going to check whether there has been an abusive refusal to supply data from companies that hold the majority of such data.

Over the last decade the economy has experienced a digital revolution. In particular, in a scenario where most of the online services – from search engines to social networks – are offered for free, data is considered today the new currency. Data may allow to improve products and services, to exploit new business opportunities and to develop more target-oriented business models. This new scenario caught the attention of several competition authorities worldwide, which are now assessing whether collection, process and commercial use of data may give rise to antitrust issues. For example, the Italian competition authority is currently running a public inquiry on the interplay between competition law and big data and the same was done by the German and the French Competition Authority already two years ago.

In order to assess whether the Commission´s concerns are justified or not, it is worthy to review a possible theory of harm associated with data collection and exploitation.

In first place, data can be a source of market power. Access to data ensure competitiveness and can trigger efficiencies. However, data can serve as an entry barrier and the circumstance that some companies have access to a bigger amount of data than smaller companies tend to increase the gap. Eventually, companies having access to more data will increase their revenue, will be able to invest more and offer better service (snowball effect).

Here we come to the decisive question. Is a refusal of access to data by manufacturers of connected and automated cars an anticompetitive conduct?

In order to answer this question, it has to be determined whether data amount to an essential facility to which access cannot be denied by its owner under EU competition law. According to the case law of the CJEU on this issue, access to a facility can be mandated if that facility/input is indispensable for carrying on a certain business. In Bronner, the ECJ ruled that a product or service is indispensable only if there are no alternative products or services and there are technical, legal or economic obstacles that make it impossible or unreasonably difficult for any undertaking seeking to operate on the downstream market to develop, possibly in cooperation with other companies, products or services.

Are data owned by manufacturers of automated and connected cars truly unique? Can insurers, repairers, leasing companies and providers of new services for which there is a potential consumer demand collect these data through other channels?

One of the key elements to answer this question will be a correct definition of the relevant market. What is the extent of substitutability between the data sets of information owned by the various manufacturers of automated and connected cars? Is access to each data set essential for providing services in the downstream markets, thereby giving rise to a separate relevant market for each data set of information where each manufacturer will be dominant, as it occurs with standard-essential patents? Or, alternatively, are all the data sets perfect substitutes, thereby giving rise to a single relevant market including all the data sets where a single manufacturer will hardly be dominant (unless it has much more data than the others)?

This is the first step that the Commission is likely to take in its analysis. It seems that the analysis of substitutability between data set is very case-sensitive and data which appear substitutes today may no longer be so in the future. In light of the stark statements released by DG Comp representatives, it may well be that the Commission has already conducted its preliminary investigation and developed its theory of harm.

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