Let's talk antitrust

Jay Modrall: Richard, good to see you again. As you know, the European Commission is half-way through a very ambitious study of the effects on competition policy from digitisation, starting with a consultation last fall, conference in January, experts reports in March. Meanwhile HMT [Her Majesty’s Treasury, in the UK] has also created an expert panel, launched a consultation, the German government appointed a panel that has already issued a report, the US FTC is doing something similar, what’s going on?  Can you tell me what this is all about?

Richard Whish QC: Yes, it’s very interesting and, of course, it is trite to say that digitisation leads to very rapidly evolving technology, brings enormous benefits to consumers and so it’s something one would want to promote and encourage and so on and so forth. Equally, I think it’s worthwhile reminding ourselves sometimes, when a new technology comes along, it kind of does need to be… somebody somewhere has to examine what’s going on and whether there could be any problems associated with it. And you think back through history, I mean canals changed the world and railways changed the world and morse code changed the world, and here we’ve got digitisation and in some respects, obviously, it is changing the world. And, eventually, various authorities say to themselves, well I wonder if we need to know a little bit more about what’s going on here.

Jay Modrall: I wanted to see if I could get your thoughts on some of the common themes that go across all or some of these reports. One of the big themes is “data bottlenecks” and whether antitrust authorities or other authorities should be mandating more access to data.

Richard Whish QC: Well, look, I mean, the first thing I would say is you’ve referred there to four different investigations that are going on, and they’re not yet completed or the entire process is not yet completed so we don’t yet know what is going to emerge at the other end. On the other hand, we can speculate to use the jargon of modern competition policy, we can speculate about theories of harm and, obviously, there has been an enormous amount of discussion of big data in recent years because the platforms do accumulate vast amounts of data. Is that a problem? Well, in and of itself, I think that’s clearly not a problem if it’s data that other people can aggregate and so on and so forth. On the other hand, I increasingly believe in the adage never say never. I can see how in certain circumstances I may possess data that you don’t have access to, would find it difficult to duplicate. Might there be circumstances in which, in competition law terms, I might be under a duty to supply you on some FRAND basis with data that I own? Now, if we think back through the history of competition law, what was the Magill case? It was about somebody who owned information that somebody else wanted access to in order to be able to compete in a downstream market and, of course, that’s what the outcome of the Magill case was.  So, I don’t see any reason conceptually, depending on the facts of the case etc, I don’t see conceptually how there mightn’t be a situation in the Magill factual set-up that might be applicable to what we would now call big data.

Jay Modrall: Big data is not all new. What about artificial intelligence?  That’s another theme that goes across all of these studies?

Richard Whish QC: Well, obviously, there has a been a huge amount of discussion of artificial intelligence and, you know, does it present a policy for competition law and are these algorithms in some sense sinister and are they going to lead to distortions of competition that conventional antitrust is incapable of capturing? I must say, I’m pretty sceptical about all of that. We know that algorithms might have the ability to track my competitor’s prices and theirs mine, or I might be trying to enforce resale price maintenance against my retailers and I use price tracking software to do that. But then I find myself thinking, is that really any different from a conventional bricks and mortar world in which I am a petrol retailer and I want to know your prices, well, I just go down the road to your garage and there’s a big sign outside saying what the price of the petrol is. So, I find myself wondering whether the algorithm that can do that is any different from me physically doing it. Of course, if algorithms lead to the accumulation of vast amounts of big data which is not replicable then we come back to what I was saying earlier.

Jay Modrall: There’s a whole series of questions relating to merger review including the treatment of innovation competition, potential competition, so-called “killer acquisitions” which is a new buzz word that’s been popping up, and whether new tools are required for these issues. Where do you think that is heading?

Richard Whish QC: Well, I mean, the first thing I would say on that is that if I ask myself how do firms compete, in some markets simply, straightforwardly, we compete on price. In other markets, we compete on better standard of service and aftercare or whatever. Obviously, there are some markets, the essence of which is competition in innovation and if a competition authority is looking at one of those markets, it will want to see whether the merger between X and Y could suppress innovation. Is that not what the Commission was doing in Dow/DuPont in a rather different world from the one we’re discussing here with digitisation? But harm to innovation as a competition consideration seems to me to be a legitimate one.

Jay Modrall: Last question. Similarly in merger review, but also in investigations of dominance for example, the connection between antitrust and privacy data protection rules consistently comes up. What are your thoughts on that?

Richard Whish QC: There are issues over privacy which perhaps are best dealt with under data protection laws etc and there has been this long running debate about to what extent should competition authorities get concerned with privacy issues, and as a general proposition it seems to me something best dealt with by other authorities. However, that having been said I can see, for example, that Firm A might compete with Firm Y by offering better terms as to privacy. Well, in those circumstances, is that not a parameter of competition? So that would seem to me to fall within the purview of a competition authority.

Jay Modrall: Thank you very much.