Degradation of privacy standards could be abuse under competition law

The UK Parliament’s European Union Committee, in its report issued on 20 April, says that online platforms are a prime example of tension between DP and competition law. The Lords stress that dominant online platforms could potentially abuse their market position by degrading privacy standards and increasing the volume of data collected from their users. If one provider has multiple sources of user data, it may prove to have an unmatchable advantage on individual online platforms, making it difficult for rival platforms to compete.

The Lords criticise large online companies for not fully explaining to consumers how their personal data may be used. As a result, trust in how online platforms collect and use consumers’ data is worryingly low and there is little incentive for online platforms to compete on privacy standards, the Lords say. “We believe this presents a barrier to future growth of the digital economy. Online platforms must be more effective in explaining the terms of such agreements to consumers.”

Online platforms must accept that the new EU Data Protection Regulation will apply to them and will be enforced, and prepare to make the necessary adaptations, they say. The new data portability provision will be a significant change. It could promote quality-based competition and innovation by making it easier for consumers to switch platforms.

“In order to encourage competition on privacy standards, not just compliance with the law, we recommend that the government and the Information Commissioner’s Office work with the European Commission to develop a kite-mark or privacy seal that incorporates a graded scale or traffic light system, similar to that used in food labelling, which can be used on all websites and applications that collect and process the personal data of EU citizens.”

European Data Protection Supervisor, Giovanni Buttarelli, will speak about “How data protection rules should be enforced in tandem with competition and consumer policy” at Great Expectations, the Privacy Laws & Business 29th Annual International Conference, 4-6 July 2016.