Watchdog: Check user data before mergers

The vast troves of consumer data held by big Internet companies should be scrutinised in merger probes because they have a big impact on competition, the president of the German antitrust watchdog told a newspaper.

“Until now, markets in which no money flows and in which no revenues are posted do not count as markets from a competition point of view. But that obviously goes against the logic of many Internet markets,” Andreas Mundt told Sueddeutsche Zeitung’s Saturday edition.

Collections of “big data” — covering billions of internet searches, messages and other online interactions — give Internet companies huge power in marketing and commerce and which potentially makes it difficult for smaller businesses to compete in those areas.

Facebook’s FB.N $19 billion acquisition of Whatsapp in 2014 almost escaped scrutiny from cartel authorities as the messaging service hardly had any revenues at the time, Mundt said, adding that it was apparently still of great strategic importance to Facebook.

“How many users are there and which data is concerned Those are the better measurement categories when it comes to defining competition in the Internet,” he said, adding that lawmakers should clarify rules.

While the German cartel authority does take data issues into account, these may be successfully challenged in court due to the lack of clear legislation, he added.

The German competition watchdog has set up a six-person Internet task force which is working on drafting plans on how German law can be adapted to the Internet age, he said.