74 LEXPERT MAGAZINE
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JANUARY/FEBRUARY 2018
Antonio Di Domenico is a partner and regional leader of the Antitrust/Competition
& Marketing Group at Fasken Martineau DuMoulin LLP in Toronto.
He is also a former counsel to Canada's Commissioner of Competition,
and a Lexpert Rising Star in 2017.
BIG DATA HAS LED to big predictions in the area of competition
law. Coupled with algorithms used in big data analytics, big data
is predicted to fundamentally change the competitive landscape
within which firms price and customize products and services, and
predict market trends. is has led to varying predictions for com-
petition law and enforcement in Canada and around the world.
Competition law and competition enforcers focus on market
forces rather than market outcomes. Acting as a referee of sorts,
competition enforcers, such as Canada's Competition Bureau, seek
to ensure that firms compete on the merits and that consumers are
well-informed through minimal intrusion.
As noted in the Competition Bureau's
recent white paper, Big Data and Innova-
tion: Implications for Competition Policy in
Canada, some believe big data will be key for
competition, underpinning new waves of pro-
ductivity and innovation. Others fear that big
data will undermine the competitive process,
including the ability of competition enforcers to effectively enforce
laws. Regardless, competition laws and their enforcers have unique
challenges to confront as big data analytics grow and develop.
Take cartels. As horizontal agreements between competitors to
fix prices, allocate markets or limit output, cartels have been char-
acterized as an assault on Canada's open market. A cartel is per se
illegal, requiring neither proof of market power nor anticompetitive
effects; competition enforcers need only prove an offence by estab-
lishing an agreement between competitors to collude.
Data and algorithms may afford competi-
tors the ability to collude without an agree-
ment. e OECD paper Algorithms and Col-
lusion: Competition Policy in the Digital Age
refers to this as algorithmic collusion. For ex-
ample, self-learning algorithms, which learn
and readapt to the actions of other market
participants, may enable collusion without
human intervention, let alone an agreement.
Mergers and monopolist practices are be-
ing tested. Laws prohibit certain means by
which a firm may create, enhance or main-
tain market power. Increasingly, data is a
competitive asset, the essential input in a
firm's product or service; access to and con-
trol over data can thus confer market power.
On the one hand, data can create eco-
nomic benefits such as efficiencies and innovative products and
services at minimal or no consumer cost. On the other hand, firms
that control data can erect entry barriers and foreclose competition,
resulting in higher prices or diminished consumer choices. Being
big in big data is not necessarily bad, but a case-by-case competitive
analysis is required.
Deceptive marketing laws are also being challenged. Materially
false or misleading representations to the public that promote a busi-
ness interest are prohibited. In principle, these laws would capture
a firm's false or misleading representations regarding its collection
and use of consumer data. But how will these provisions be applied
to big data analytics? Data is no longer incidental to advertising. It
is a game-changer, and arguably the principal method to assess buy-
ing behaviour, since consumers leave their digital footprints every
time they use the internet and social media. In these circumstances,
what, if any, level of disclosure could and should be provided to
consumers regarding the use of a consumer's data? Again, deceptive
marketing laws were not draed with these circumstances in mind.
Competition laws in Canada date back to 1889, and the legisla-
tive draers could not have anticipated the emergence of big data
and the algorithms used in big data analytics. Accordingly, is Can-
ada in need of amended competition laws and enforcement tools, or
will the status quo suffice? e competition community is debating
that fundamental question; stay tuned.
ILLUSTRATION:
CLARE
MALLISON
Big Data and Competition Law
Is Canada in need of amended competition laws and enforcement tools, or will the status quo suffice?
>
"COMPETITION LAWS
AND THEIR ENFORCERS
HAVE UNIQUE
CHALLENGES TO
CONFTONT AS BIG DATA
ANALYTICS DEVELOP"
| COLUMNS |
BY ANTONIO DI DOMENICO
CHANGE AGENT
