INTRODUCTION:
This article explores the emergence of data pooling as a result of the growth of the digital economy. Data pooling, or pools, lacks a legal definition; however, the phrase is employed when companies mutually decide to exchange their digitized information about a certain market, a particular service, or generally within an industry or an e-ecosystem. About this new business practice of creating data pools, it is important to evaluate its compatibility with EU competition regulations, taking into account the relevant guidelines and legal precedents established by the EU Commission regarding data sharing. This includes collaborations in research and development (R&D), standard-setting, patent pools, information exchange, and collusion. Prioritizing the development of a shared sense of collaboration and implementing innovative technical solutions are crucial for effectively pooling data in the digital economy. For instance, cars that are connected and capable of self-driving may only function well if car manufacturers, repair maintenance shops, leasing organizations, and self-driven car service providers collaborate to share their digital information about the cars. For this to occur, corporations and other interested parties must define collaborative technological standards for data interoperability.
Advantages and Hazards of Data Pooling:
Moreover, the aggregation of substantial amounts of data has the potential to radically alter the business models of numerous sectors. Pooling health, pharmaceutical, and patient data in certain industries, such as the pharmaceutical business, can have significant advantages. Sharing data enables firms to enhance the personalization of future goods and optimize drug development and healthcare solutions processes. Significant efficiency improvements can be achieved in the financial sector by consolidating financial data, both personal and non-personal, among banks and other financial institutions. This study will demonstrate the advantages of data pooling in certain industries while also highlighting the associated hazards. Sharing sensitive business data increases the likelihood of organizations engaging in collusion, as it enables a higher level of openness that facilitates tacit collusion and reduces investment in research and development. Companies that combine data can exchange essential commercial and competitive information, such as pricing, production, and new product advancements. Aggregating such data can enable cooperation among competitors. Furthermore, pricing algorithms can be linked to data pools, potentially enabling sophisticated one-sided pricing strategies that result in price discrimination or exorbitant pricing.
Obstacles and Solutions:
Data pools can potentially serve as an obstacle for other companies seeking to enter the market. Accessing the information in the pool is essential to reach the relevant digital or physical market. The pool’s collective knowledge can indeed facilitate the exclusion of a competitor, potential competitor, or other parties.
Despite these hazards, I also contend in this paper that smaller enterprises combining their data may serve as a solution to a more severe competitiveness issue. The current legal framework governing data and the Internet appears to favour the dominant players, known as gatekeepers, in the virtual ecosystems formed around e-platform “silos” Companies such as Amazon, Google, and Microsoft excel at collecting and organizing large amounts of data because they have control over the data within their digital ecosystems. The large Internet giants possess the greatest amount of data, and the dominance of these few companies in terms of data concentration may provide a more significant challenge to competition compared to smaller enterprises pooling their data.
Conclusion:
In conclusion, the scope of data pooling under competition law is complex, with both benefits and hazards. Striking a balance between collaboration and safeguarding competition is crucial. The article suggests that smaller enterprises pooling data may provide a solution to competitiveness challenges posed by dominant players in the digital ecosystem. Understanding the evolving dynamics of data pooling is essential for fostering a fair and competitive business environment.
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