Big Data and Regulation: The debate

Recent press coverage quoting CoDE’s Professor Annabelle Gawer reflects the growing importance of the question of data, and how it is regulated:

  • From the New York Times, ‘Data Could Be the Next Tech Hot Button for Regulators’: is regulation punishing organisations based on what they might do?
  • In an article in The Times Annabelle points out that digital companies cannot hope to remain unregulated indefinitely if this stifles competition; and
  • In the Financial Times, in a discussion of the ‘omniscient tech company’ and the shift in the source of corporate value, she reflects that, ‘mastery of data is like the steam engine of our age.’

It’s clear that data is evolving into far more than the sum of its parts – and this flags up issues around how tech giants use data.

To explore this controversial issue, late last year the Organisation for Economic Cooperation and Development (OECD) held a hearing discussion on Big Data: Bringing Competition Policy to the Digital Era to explore the implications on competition authorities’ work and whether competition law is the appropriate tool for dealing with issues arising from the use Big Data. Here’s how the OECD framed the discussion:

The exponential growth of the digital economy has enabled the rise of business models based on the collection and processing of “Big Data”. The use of big data by firms for the development of products, processes and forms of organisation has the potential to generate substantial efficiency and productivity gains, for instance by improving decision-making, forecasting and allowing for better consumer segmentation and targeting. However, acquiring the necessary size to benefit from economies of scale and scope and network effects related to Big Data may potentially lead to monopoly positions, further enhanced through mergers of smaller, new providers of services that do not at first glance appear to be in the same market.

Annabelle — Professor of Digital Economy at Surrey and an expert on Platforms — delivered a talk on ‘Competition policy and regulatory reforms for big data: Propositions to harness the power of big data while curbing platforms’ abuse of dominance’, sharing the panel with Hal Varian, Chief Economist at Google. It was a 400-strong audience comprising all the country members of the OECD, plus representatives from professional associations, civil society associations and the European Commission.

Her view: ‘As far as regulation (and in particular in the area of competition law) when Big Data is concerned, we need to take advantage of the value-generating opportunities brought about by the new digital technologies and need to keep a balanced view: this means stay clear of, on the one hand, over-regulating, which would stifle innovation, but on the other hand, regulators need to educate themselves and remain vigilant with regard to the new behaviours of dominant platforms.’

Stay tuned to CoDE for insight and breaking news from the front line of the Data debate.


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About the Author : Kris Henley

Communications and Outreach for Surrey Business School's Centre for the Digital Economy, a newly-founded research centre to explore the implications of the Digital Economy for business, government and society.