Is Data Power?

Abstract

The objective of this thesis is to examine whether the possession of Big data constitutes a power that can be equated with that of a dominant position under article 102 TFEU. Specifically, the thesis examines the launch of the preliminary investigation into Amazon’s potential antitrust violation. By examining how Amazons dual role, as an operator of a platform and a seller on said platform, combined with its exploitation of Big data from third party sellers may constitute abuse of a dominant position pursuant to article 102 TFEU.The thesis is divided into three parts, the first part of which conducts a legal analysis. The analysis presents the case law for which an undertaking is said to have a dominant position and the prohibition for abusing such a position, as prescribed in article 102 TFEU. The examination does not find Amazon’s behaviour to constitute a violation of article 102 TFEU, as the undertaking did not have a dominant market position. In the absence of a dominant position, Amazon is not in violation of the antitrust rules. Should Big data be introduced as an element of the dominance assessment, Amazon’s possession of Big data may establish a dominant position equal to that achieved through a high market share. Having a dominant position, when in possession of Big data, the undertaking will be found to abuse said position pursuant to article 102 TFEU. The second part of the thesis conducts an economic analysis of how internal conditions are affected by a contract party deviating from the original agreement. Through New Institutional Economics, Principal Agent Theory, Transactions Costs Theory and Game Theory, not only the firms but particularly the consumer welfare is set to gain from Amazon’s exploitation of Big data. If regulated, the consumer welfare will deteriorate significantly, as will the society welfare and finally the firms’ potential profit maximation. The third and final part of the thesis conducts an interdisciplinary analysis. This part is based on the conclusions from the second and third part to set up an analysis that puts forth four recommendations as to how Big data should be processed by an operator of a platform. These recommendations are I) Possession of Big data should be included as an element in the dominance assessment, II) Transparent and predictable contract terms between the operator of a platform and the third-party seller should be stated in the contract, III) Introducing a prohibition of self-referencing of own products and finally, IV) it is recommended not to overregulate as it will suppress innovation. Finally, the thesis finds Big data to constitute such a significant power in the digital world, it should be included in the EU dominance assessment. However, it must be regulated in such a way that it does not harm economic conditions, in particular the consumer welfare.