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Competition Issues While We Were Sleeping

How much thought has any of us given to the fact that we are walking and talking gold mines for companies that thrive on data? Has any of us ever thought about the quantum of data that we generate, not just while we are awake but even when we sleep?

Sounds a little absurd but if we look at it from the point of view of a party interested in that data then the reality would dawn on us. When we purchase a smart watch or any wearable device to keep track of our health parameters, it records those parameters while we are awake and even when we sleep, it is our personal data and it gets recorded on the server of the smart watch or the software application (app) that we use for the said purpose. The data that gets recorded for example is data like heart rate, blood pressure, sleep pattern, some-times the nature of data may be more extensive and may relate to tracking details of our walk/jog/run, number of steps taken, duration of our walk, stress indicators, deep sleep duration, time when we eat and what we eat etc.

Most of these parameters that are constantly being recorded to monitor our health are for our benefit, all sensitive personal data. If the said data is made accessible to the market it would have buyers in the market who may benefit by exploiting the data and promoting their products.

If without our knowledge the smart watch or the app which is connected to the internet, transmits the data that is available with it and makes it available to an interested third party, it would breach our privacy which is a fundamental right guaranteed to us under the Constitution of India and to safeguard which, the Data Protection Bill, 2021 is introduced in the Parliament.

The breach of privacy would be addressed by the Data Protection Bill, 2021 once it attains statutory status of an Act of Parliament in India. However, things would be different if we become alert and aware about the fact that the smart watch or any wearable device or the health app that we buy/use to monitor our health doesn’t just record data that we are interested in but the said data has buyers in the market who would exploit the said data in different forms, sometimes to our detriment.

With the knowledge would also come the awareness to look for and buy the smart watch, wearable device or to log in to the app that has the appropriate data protection policy, this is the non-price factor that we should be concerned about while we enter the digital world. That is where competition over the non-price factors would play a huge role.

If on account of abuse of dominance or anti-competitive agreements between competitors such non-price factors get compromised it would impact the competition in the market and ultimately the customers. The direct impact on the customers would be the compromise with the quality of the Data Privacy Policy, which is an important consideration for customers while purchasing products of this nature and therefore the Competition Commission would have a role to play in such cases.

Since decades, companies that run search engines and companies in the IT sphere that provide its services for free to our general amazement, have actually been collecting our invaluable data which is then exploited in different forms, mostly without our informed consent and knowledge about the exploitation of such personal data. Business empires have been built solely on the strength of the price that we paid with our data, in hindsight perhaps it would have been better if they had put a visible price tag on the services rather than fleece us of our personal data which compromised our privacy and led to exploitation of our sensitive personal data.

Data in the International jurisdiction for merger analysis has been recognised as a non-price factor of competition since quite some time, both in US and EU. However, in India Competition Commission of India (CCI) conducted a study of Telecom Market and in its study it first recognized that non-price parameters would begin to play an important role in driving competition and that privacy can take the form of non-price competition.

Recently while issuing a direction for investigation under Section 26(1) of the Competition Act, 2002 in respect of the WhatsApp privacy policy, CCI has recognized certain aspects of data privacy policy as non-price parameter of competition. CCI echoed the concerns regarding impact on competition and consumers by degradation of privacy standards as indicated above and it observed “that in a data driven ecosystem, the competition law needs to examine whether the excessive data collection and the extent to which such collected data is subsequently put to use or otherwise shared, have anti-competitive implications, which require anti-trust scrutiny … Today’s consumers value non-price parameters of services viz. quality, customer service, innovation, etc. as equally if not more important as price. The competitors in the market also compete on the basis of such non-price parameters. Reduction in consumer data protection and loss of control over their personalised data by the users can be taken as reduction in quality under the antitrust law. Lower data protection by a dominant firm can lead to not only exploitation of consumers but can also have exclusionary effects as WhatsApp/Facebook would be able to further entrench/reinforce their position and leverage themselves in neighbouring or even in unrelated markets such as display advertising market, resulting in insurmountable entry barriers for new entrants.

The suo-moto interference by CCI was the result of WhatsApp coming out with its new Data Privacy Policy, which was of the ‘take it or leave it’ nature where data of users was being offered to Facebook for its usage, that is when a lot of us woke up to the reality of our personal data being something of value and of interest to third parties and for the need to protect it. The impact of the awakening to the compromise on data privacy was so much that a lot of us downloaded rival apps of WhatsApp like ‘Signal’ and ‘Telegram’, which claimed that the data of its users was secure on account of their state-of-the-art end to end encryption and that they do not share the data with non-intended recipients. This led to a sudden surge in competitive value of rivals of WhatsApp, leading to WhatsApp taking notice of it. As a result, WhatsApp even came up with advertisements across the Country in form of huge billboards and on electronic media as well to counter the perception that the data shared on WhatsApp was not secure, the said campaign possibly helped WhatsApp arrest the otherwise ongoing mass exodus amongst its users.

We are therefore at the cusp of history where data privacy has become a consideration for consumers and it is also an important parameter for competition in the markets. Consequentially the competition law jurisprudence is expanding to include non-price factors like data privacy in its realm. These issues clearly affect our day to day life and previously we did not think much about them due to lack of awareness around them. Now when the situation has come to a head where the each one of us has started thinking about why it happens that the moment we think, discuss or search about something of commercial value we are flooded with advertisements that find their way on our screens, into our inbox or advertisement flashes on top of our social media pages that we visit, all pointedly regarding that very thing, product or a service about which we thought, discussed or searched a minute ago.

We now realise that it’s not wizardry or the magic of the internet that we are dealing with but purely the price that we have been paying for otherwise ostensibly free products on internet through our invaluable personal and sensitive data. Therefore, it’s important that more such issues regarding non-price parameters affecting competition and ultimately lives of consumers are dealt with and taken up by the CCI and also that sooner than later the Data Protection Bill, 2021 gets assent of the President to become an Act of the Parliament for it to protect us from the breach of our privacy.


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