UK & EU Parallel Competition Enforcement Cases Against Digital Platforms Target Practices Over Use Of Data



As recent case announcements from both the EU Commission and the UK Competition & Markets Authority (“CMA”) show, European regulators continue to place enforcement priority on tackling alleged anti-competitive agreements and practices within the digital platform sector using their competition powers. These cases show that there is an increasing concern about the market power digital platform acquire through their ability to restrict access to or source and leverage data.

On 4 June 2021, the EU Commission announced that it had started an investigation into possible anti-competitive conduct by social networking site, Facebook, about whether Facebook’s use of advertising data gathered from in particular its own advertisers amounts to a breach of Article 101(1) and/or Article 102 of the Treaty of the Functioning of the European Union (“TFEU)” (see Case AT. 40684 – Facebook leveraging. Commission press release IP/21/2848

On the same day, the CMA announced that it had opened a similar inquiry into Facebook and into whether it had abused its dominant position contrary to Chapter II of Competition Act 1998. The CMA’s investigation focuses on whether Facebook has gained an unfair advantage over its competitors in providing services for online classified ads and online dating, through how it gathers and uses certain data.

Google is now the latest company to be subject to parallel enforcement by the EU Commission and the CMA albeit staggered by a few months.

On 22 June 2021, the European Commission announced that it has opened an in-depth investigation to assess whether Google has infringed Article 101 and Article 102 of the Treaty on the Functioning of the European Union by favouring its own online display advertising technology services in the 'ad tech' supply chain, to the detriment of competing providers of advertising technology services, advertisers and online publishers.

Google provides several advertising technology services that intermediate between advertisers and publishers in order to display ads on web sites or mobile apps. The Commission stated that its investigation would examine whether Google is distorting competition by restricting access by third parties to user data for advertising purposes on websites and apps, while reserving such data for its own use.

As part of its in-depth investigation, the Commission will examine obligations to use certain Google services and Google Ad Manager to purchase and serve online display advertisements on YouTube and restrictions placed by Google on the ability of third parties, such as advertisers and competing online display advertising intermediaries, to access data about user identity or user behaviour which is available to Google's own advertising intermediation services. The Commission will also examine Google's plans to prohibit the placement of third party cookies on Chrome and replace them with the "Privacy Sandbox" set of tools and to stop making the advertising identifier available to third parties on Android smart mobile devices when a user opts out of personalised advertising.

In the UK the CMA had been examining similar practices in its own competition investigation which it launched under Chapter II of the Competition Act 1998 on 7th January 2021 into suspected breaches of competition law by Google. The CMA investigation concerned Google’s proposals to remove third party cookies (TPCs) on Chrome and replace TPCs functionality with a range of ‘Privacy Sandbox’ tools, while transferring key functionality to Chrome.

However, in a sign of a more conciliatory approach to digital platforms by the CMA and by extension the new Digital Markets Unit the CMA published on 11th June a notice of intention to accept the commitments offered by Google and has invited representations from interested third parties. The CMA and DMU appear to be adopting a more consultative approach to these difficult and novel problems to gain compliance through cooperation with the platforms concerned rather than through wielding a big stick.

It will be interesting to see whether the CMA’s approach is reflected in Brussels when the Commission concludes its investigation into Google. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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