Market Definition and Market Power in Data: The Case of Online Platforms

Abstract

With the emergence of data as an asset for market players operating in the digital economy, questions have risen about the relevance of data for competition enforcement. This article focuses on the role of data in the competitive process between online platforms including search engines, social networks and e-commerce platforms. After arguing that situations can be identified in which access to data is a competitive advantage for incumbents and an entry barrier for new entrants, it is analysed how a relevant market for data can be defined and how market power can be established in such a market. Most providers of online platforms do not trade data as a stand-alone product as a result of which no supply and demand exists and no relevant product market for data can be defined under current competition law standards. However, it may still be appropriate for competition authorities in this situation to assess proposed concentrations and alleged abusive behaviour of dominant firms beyond the relevant markets for the services provided to users and advertisers. By defining a wider market for data, a form of potential competition can be taken into account whereby market players also compete for the asset that is used as an input to develop or improve services offered on online platforms.