The Competition and Markets Authority (CMA) is investigating how consumer data is collected, used and traded in the UK – examining online information gathering in particular.
It is calling for information from the marketing industry to find out more about how personal data, aggregated information and supposedly anonymised metadata is collected and traded in advance of the new European Union Data Protection Regulations, which could become law before the end of the year.
The CMA, said its CEO Alex Chisholm, needed to find out more about the market as a result of “technological developments”, such as big data analytics.
“The ease and extent with which consumer data can be collected and analysed has increased hugely in recent years and will grow further with continuing technological developments,” said Chisholm.
He continued: “We have witnessed a strong drive to gather our personal data by internet companies. This has a positive side, in that it helps us get access to new online services, to receive more targeted advertising and better tailored service offerings. But not everyone appreciates the collection of our personal data and observation of our online behaviour.
“One of our priorities as a new authority is to take a closer look at developments and practices in growing areas such as this. We want to understand better the ways in which consumer data is used, as well as the consequences from this – beneficial or otherwise – for consumers, businesses and the wider economy, and how the CMA may promote competition in this area.
“As an initial step, we want to get the views of all those involved – consumers, firms, representative groups and those who analyse and use the data.”
The CMA has released a consultation paper to provide a guide to organisations that may be affected.
Pinsent Masons competition lawyer Sammy Kalmanowicz said that the CMA had already indicated that it plans to take a closer regulatory and competitive interest in the sector.
“In a speech last month Alex Chisholm said there was a need for competition authorities to currently ‘play a more modest role’ in relation to questions about how consumers’ personal data is collected and used by businesses after suggesting that policymakers and society had still to work out just how comfortable they are with such practices in the digital age,” Kalmanowicz told Pinsent Masons’ Outlaw.com website.
He added that the pan-European trading of such information, together with the new data protection regulations, had complicated matters and may well lead to restrictions. Indeed, some people have argued that the new regulations may well inhibit the development of social media and big data across the EU.
“The European Commission has, in the merger control context at least [such as Google’s acquisition of online advertising company Doubleclick] already considered big data and its potential effects on competition even if it has not scrutinised the issue in depth,” said Kalmanowicz.
He continued: “However, it is inevitable, given the reforms to EU data protection laws, the EU’s digital single market initiative and the call for greater collaboration between competition authorities and data protection agencies, that we will see a fuller assessment of big data particularly in the merger control framework in future.”
There was also a serious competition aspect because “as companies become better at harnessing the data at their disposal that information is likely to confer an increasing competitive advantage and give companies with access to data the ability to shut others out of their markets,” he added.
The CMA’s consultation will close on 6 March 2015 at 5pm.