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Abuse of Dominance under Article 102 TFEU : Reconciling Issues of Competition Law and Data Protection Law of the EU

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Title: Abuse of Dominance under Article 102 TFEU : Reconciling Issues of Competition Law and Data Protection Law of the EU
Author(s): Pasanen, Tiina
Contributor: University of Helsinki, Faculty of Law
Discipline: European law
Language: English
Acceptance year: 2020
Digitisation of information has, together with the advent of the internet and the rise in computing power, changed our ability to access and distribute vast amounts of data among an increasing number of people all around the world. Transforming data into innovations drives the competitiveness and economic growth of the European Union. Online platforms play an important role in this process. Competition law of the EU prevents competition within the single market from being distorted, contributing to the welfare of consumers. Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibits the abusive behaviour of an undertaking holding a dominant position within the internal market. A dominant undertaking may not strengthen its dominance in a way restricting competition. A large part of the data processed in the digital economy is personal data. Personal data may serve as a raw-material for innovation, but protection of personal data is enshrined, together with privacy, as a fundamental right under the Charter of Fundamental Rights of the European Union and the European Convention on Human Rights. Processing of personal data must comply with the rules of the General Data Protection Regulation (GDPR) of the EU. Article 102(a) TFEU prescribes that an abuse may consist in imposing unfair trading conditions. It has been suggested that this kind of exploitative abuse could be committed by setting down unfair terms relating to the processing of personal data in accordance with the privacy policy of a dominant undertaking. The privacy terms of Facebook were found to be abusive in the decision of the German competition authority, Bundeskartellamt, in February 2019. This study aims to examine whether a dominant undertaking could commit an abuse within the meaning of Article 102(a) TFEU by breaching the data protection rules of the GDPR. Quality is a parameter of competition, and the European Commission has noted that privacy may be an important element of quality. Degrading the quality of privacy by imposing privacy terms in violation of data protection law has been suggested to be able to cause damage to consumers in a manner constituting an abuse. The European Commission and the Court of Justice of the European Union (CJEU) have found that trading conditions under Article 102(a) TFEU may be exploitative if they are unfair in the sense that they are disproportionate and not necessary in relation to their legitimate objective, or if they are unilaterally imposed and non-transparent. Committing an abuse within the meaning of Article 102(a) TFEU is possible by imposing privacy terms which infringe data protection law. The mere breach may not, however, automatically establish an abuse. The terms may be exploitative if they can be set above the competitive level by means of market power. A data breach which can profitably be carried out by a non-dominant undertaking does not involve use of market power and may thus not constitute an exploitative abuse. Exploitation differs from an exclusionary abuse in that it always involves exercise of market power. As there is in the EU competition law no requirement of a causal connection between an abuse and a dominant position, exclusion is possible even without use of market power. Finding an exclusionary abuse requires that the conduct has anticompetitive effects, but exploitation, on the other hand, does not cause direct detrimental effects on the structure of competition. Exploitation and exclusion are not mutually exclusive, and imposing privacy terms in violation of data protection law could be considered to constitute an exclusionary abuse if the conduct impedes competition. A dominant undertaking has a special responsibility not to impair the residual competition on the market. Competition law and data protection law of the EU both pursue the well-being of the EU and its citizens in slightly different ways. The scope of Article 102 TFEU is sufficiently broad to take into account issues relating to privacy and data protection. Assessing an abuse always requires taking into consideration all the relevant circumstances in accordance with the criteria established in the case-law of the CJEU.

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