Thursday, November 23, 2017

Why Italian regulators have zoomed in on big data

by Francesco Liberatore, Communications and Competition Partner, Squire Patton Boggs

Three Italian regulators announced a wide-ranging joint investigation into big data in June. Noting that big data is a key digital asset in the modern economy, the Italian Competition, Communications and Data Protection Authorities launched a ground-breaking joint inquiry that will look to examine a range of issues together including data privacy, competition issues such as barriers to entry, interoperability net neutrality, and consumer protection.

This is the first time that such a joint inquiry has been held in Europe, demonstrating how important they view big data in relation to multiple forms of regulatory compliance. The inquiry will include information requests and public hearings. Although the statutory powers for sending such requests are delegated to the Competition Authority, the other watchdogs involved will no doubt input into these requests.

Under the banner of “promoting [digital] pluralism” and promoting technology innovation, the Italian regulators will seek to assess how businesses amass, utilize and retain big data sets. Big data sets can be differentiated from other forms of data or statistics by its sheer volume, ability to continuously update in real-time and, in doing so, the provision of immediate analysis. This allows companies to instantaneously improve services, identify risk, and generate new business, such as through targeted online marketing.

The launch of this inquiry is a sign that the Italian authorities are looking to keep pace with their neighboring regulators on investigating big data. The French and German competition authorities released their own inquiry into big data last year, on 16 May 2016.

This report noted that case-specific assessments would be appropriate for such investigations, where such analysis had only previously been done with respect to mergers and acquisitions. They noted that it is possible that the exclusionary nature of big data collection could have anticompetitive characteristics.

The Italian investigation also follows on the footsteps of European-wide investigations into big data and the technology sector more broadly. The EU’s Digital Single Market strategy aims to break down potential barristers across Member States that restrict a European-wide market from flourishing, which includes initiatives to boost e-commerce, ensure data privacy and support a ‘gigabit society’, among many others.

In May, the final report on the E-commerce Sector Inquiry pointed to how data collection and usage could lead to possible competition concerns, looking at various restrictions on the market. In addition, the European Commission’s Directorate-General for Competition has undertaken a number of high-profile investigations of technology companies involving the use of big data and data sharing.

Another important note is the potential emphasis on interoperability and how net neutrality in particular will be examined as a result. As the Agency for Digital Italy (AgID) launched an initiative named #Data4all last year, to ensure coherence with the EU Digital Agenda, interoperability is front-of-mind for Italian legislators and regulators alike.

Relating back to the banner of ‘digital pluralism’, interoperability could indeed rise as one of the main topics under consideration in this review and follows other policy makers and regulators around the world looking at this topic – including within the context of the ongoing negotiations of the new EU electronic communications code between the European Commission, European Parliament and Council.

The three Italian regulators are currently agreeing on a timeline and action plan for the sector inquiry. This is thought to include information requests in early September and hearing from as early as mid-September. The real question will be how any outcomes of this Italian investigation might impact EU-wide regulation. Given many enforcement actions in this area over the last year, companies will need to take note of the Italian inquiries and be mindful of the EU-wide implications of their inquiry submissions.