On June 6, 2017, a committee within Japan’s Fair Trade Commission published a report on competition policy and big data. The report is based on a concern that dominance of big data by certain major technology companies could impede competition and innovation, and addresses how Japan’s Antitrust Act (Act) could be applied in this context.
A main focus of the report is how certain cases of “collection of data” and “use of data” could trigger antitrust issues.
With respect to collection of data, one example of anticompetitive conduct given in the report is when a company enters into a business alliance agreement on the condition that the counterparty transfers to the company the ownership of all data that is to be acquired through joint development. The report states that this could constitute unfair trade practice prohibited under Article 19 of the Act if it impedes competition by reinforcing a party’s superior position in a market or by decreasing the motivation of the counterparty to engage in research and development. Another example is when a company provides a popular online platform that prevents its users from easily switching to a similar platform provider (e.g., by transferring data of SNS posts), and the company makes changes to its policy regarding how it collects user data that is detrimental to users. The report, while mentioning that this issue would, in general, be dealt with under Japan’s Act on the Protection of Personal Information or consumer protection-related laws, discusses that it also could trigger antitrust issues, such as abuse of superior bargaining position. It is reported that this policy on data collection is designed to target major technology companies, such as those providing search engine and SNS services.
Regarding use of data, the report discusses mainly prohibitions on access to data that could constitute unfair trade practice. When a dominant company in a market of maintenance of certain machinery refuses to provide its competitors access to its real-time data of operation of the machinery, in certain instances it could be deemed anticompetitive. For example, if a major elevator maintenance company refused to provide new entrants with data on how certain of its elevators have been operating, it could constitute unfair trade practice.
The report was prepared by a committee of 11 experts, including lawyers and university professors, which was established under the Competition Policy Research Center of JFTC. While the report is not an official guideline of JFTC, it is reported that JFTC expressed its intention to “respect” the report upon enforcement of the Act. In light of this, technology companies operating in Japan should continue to raise their compliance awareness, especially on the collection and handling of big data.