Antitrust Regulation on Refusal of Data Scraping and Sharing: Application of the Essential Facilities Doctrine
Jet Deng, Senior Partner, Dentons Beijing Office
@CRESSE, 5 July 2019
I. Typical Cases of Data Scraping and Sharing II. The Application of Essential Facilities Doctrine
III. International Consensus and Unresolved Issues
Contents
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I. Typical Cases of Data Scraping and Sharing
A. Data: Critical Competitive Resource
Social Networking
Ridesharing
Data is a valuable commercial asset and a new competitive edge in the digital economy.
Network effects and economies of scale lead to increasing concentration of data on certain platforms.
Data scraping and sharing disputes are global issues.
Payment
Shopping
Search
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I. Typical Cases of Data Scraping and Sharing
B. Applicable Laws
Platforms
Refusal of Data Scraping
Refusal of Data Sharing
Applicable Laws: − Personal Information/Data
Protection Law − Tort Law − Anti-Unfair Competition Law − Antitrust Law
Refusal to supply? Application of essential
facilities doctrine?
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C. Scraping and Sharing in China
I. Typical Cases of Data Scraping and Sharing
Data scraping dispute between
Huawei and Tencent (2017)
Data sharing dispute between Cainiao and SF Express (2017)
I. Typical Cases of Data Scraping and Sharing
D. Scraping in US: hiQ v. LinkedIn (2017)
?
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LinkedIn is the world's largest professional network.
hiQ scraps LinkedIn users’ data and provides employee performance assessment for client firms.
I. Typical Cases of Data Scraping and Sharing
D. Scraping in US: hiQ v. LinkedIn (2017)
?
HiQ argued that LinkedIn’s refusal to provide data violated the essential facilities
doctrine and it took advantage of its dominant position in the upstream market of
professional networking to secure an unjustified advantage in the downstream
market of data analytics.
The court, out of public interest concerns, ordered LinkedIn to remove technical
obstacles that prevented hiQ from scraping public data within 24 hours.
It is the first case to apply the essential facilities doctrine to data scraping disputes.
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E. Sharing in EU:Bank Data and Fintech (2017)
I. Typical Cases of Data Scraping and Sharing
In October 2017, the European Commission raided several banks in EU member
States, suspecting that they had entered into monopolistic agreements with industry
associations and/or abused their dominant market position by refusing to provide the
user-authorized account information for non-banking fintech companies.
This case also proved that refusals to provide data may constitute abuse of market
dominant position by refusing to deal.
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A. Essential Facilities Doctrine in the US and EU
II. The Application of Essential Facilities Doctrine
Originated in US Case Law
United States v. Terminal Railroad Association (1912)
Verizon v. Trinko (2004): the US Supreme Court has never recognized such a
doctrine
Applied in the EU (IPR Disputes)
Magill v. Commission (1995), IMS v. Commission(2011)
Microsoft v. Commission (2007): whether refusal to license IPR would restrict
innovation
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A. Essential Facilities Doctrine in the US and EU
II. The Application of Essential Facilities Doctrine
At the core of it, when a facility is an essential element in the market
competition, controllers of the facility must provide competitors with the access
to the facility, which could be tangible facilities such as railway, energy, as well
as intangible facilities such as patents. The purpose of applying this doctrine in
antitrust law is to avoid the blockade of competition in downstream market.
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II. The Application of Essential Facilities Doctrine
B. Essential Facilities Doctrine in China
Several provisions and guidelines of China’s Anti-Monopoly law includes essential
facilities doctrine:
− Provisions on Prohibition of Abuse of Dominant Market Position by Administrative
Agencies for Industry and Commerce (2011)
− Provisions on Prohibition of Abuse of Intellectual Property Rights to Eliminate or
Restrict Competition (2015)
− Anti-monopoly Guidelines on IP Abuse (draft for comments) (2017)
− Provisions on Prohibition of Abuse of Dominant Market Position (draft for comments)
(2019)
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II. The Application of Essential Facilities Doctrine
Possession of essential facilities is one of the factors in market dominant position
determination.
Refusal to provide essential facilities under reasonable conditions may constitute
refusal to supply.
Application of essential facilities doctrine shall consider the following factors:
− feasibility of investing in or developing such facilities by other undertakings;
− degree of reliance of other undertakings on such facilities for effective production and
operation; and
− possibility of making such facilities available and its impact on the production and
operation of the facilities controller.
B. Essential Facilities Doctrine in China
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II. The Application of Essential Facilities Doctrine
C. The Requirements for the Essential Facilities Doctrine
1. Facilities are indispensable to carry on the requesting party’s business.
2. Facilities have no actual or potential substitute.
Legal, technical or economic barriers
3. Refusal to provide facilities may eliminate effective downstream/neighboring market
competition and/or restrict innovation.
4. It is possible to provide facilities to the requesting party, which would not cause
unreasonable harm to the facilities controller.
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D. Application of Essential Facilities Doctrine in Refusal of Data Scraping
II. The Application of Essential Facilities Doctrine
Is the data indispensable for downstream/neighboring market competition?
Does the data has actual or potential substitute? (disclosed data v. undisclosed data, network effect)
Would refusal to supply data leads to elimination of effective competition and/or restrict innovation?
Trade off: benefits and harms of compulsory data sharing
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III. International Consensus and Unresolved Issues
A. International Consensus
France, Germany, Netherland, the UK, Japan and Singapore have issued reports on
data and competition.
Data as a source of market power
• Under certain circumstances, data may constitute essential facility
Data-related Exclusionary Conducts
• Refusal to access——Application of essential facilities doctrine
• Discriminatory access to data
• Exclusive contracts
• Tying/bundling
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III. International Consensus and Unresolved Issues
B. Unresolved Issues
What kind of data may constitute essential facilities?
− Undisclosed data, such as credit information and financial
information
− Disclosed data such as public social networking information
The interplay between the Anti-Monopoly Law and the
Personal Information Protection Law
− Data controller cannot provide data to a third party without data
subjects’ prior consent
− Whether data/privacy protection can be used as a ground for refusal
to provide data?
Thank you
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DENG, Jet Senior Partner Beijing Office Tel.:010 - 5813 7038 Email:[email protected]
WeChat Public Account: “Antitrust Practice Review”
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