Big Data and the Automated Vehicle Sector: competition law highlights from recent announcements in Brussels

To say there has been a lot of activity recently in Brussels concerning big data, the digital economy and competition law would be an understatement. The Brussels antitrust community was abuzz with the European Commission's ("EC") much anticipated conference on shaping competition policy in the era of digitisation, which took place last month and was attended by a delegation from HSF's Brussels competition team.

In this short piece we look at one issue which is of interest to the automated vehicle sector and featured in the discussions leading up to the conference as part of the EC's consultation on Shaping Competition Policy in the Era of Digitisation, which attracted numerous submissions by interested parties. This is the issue of big data and its importance for Connected Automated Vehicles ("CAV") and competition in the sector.

The EC is increasingly focusing on data as a key input for the digital economy. It is very much aware of concerns that access to data – or rather lack thereof – may result in competition issues for smaller players who claim that lack of access to such data prevents them from competing with bigger players and platforms. While this issue is of much more general application, the submissions received by the EC reflect that these concerns may be specifically applicable to the automated vehicle sector too. In particular, access to data generated by CAVs may be an issue for independent service providers.

EU Policy on CAVs

CAVs are a focus of the EC's Digital Single Market strategy and the EC is keen to take the action necessary to promote them. To this end, it has adopted the Connected and Automated Mobility in Europe policy to support the introduction and deployment of CAVs, committed to developing infrastructure to support CAVs such as digital cross-border corridors and the Cooperative Intelligent Transport System and has also run a public consultation for Recommendations on Connected and Automated Mobility focused on data, cyber security and the use of 5G commercial bands.

Access to Data: the main competition law concern

From a competition law angle, while market players need to comply with the EC's Guidelines on Horizontal Cooperation Agreements when setting standards in this evolving sector; increasingly, and as highlighted above, access to data has become the main focus of the EU competition authority in this sector.

CAVs are designed to communicate internally with the driver, as well as interact with other vehicles and external infrastructure. In 2014, it was estimated that some plug-in hybrid vehicles generate about 25 GB of data in an hour. It is evident that data generated by CAVs has vast potential in improving services (e.g. in predicting the need for maintenance or identifying faults in the vehicle), and also in generating new services and business models (e.g. parking spot finders, personalised car insurance etc.).

The concerns raised in the recent discussions preceding the EC's conference is that manufacturers of CAVs, being the de facto controllers of data, will use their privileged position to exclude independent service providers that provide services such as repair and servicing, replacement parts, rental vehicles, breakdown services etc. A 2017 report by the EC found that the existing in-vehicle data platforms are not in themselves enough to promote competition and highlighted the risk of manufacturers distorting competition and stifling innovation by limiting data access to independent service providers.

Currently, manufacturers design CAV systems as a 'closed black box', which is programmed to communicate exclusively with them. The alternative proposed by manufacturers is an 'extended vehicle' concept where they would grant independent service providers access to some types of data through their server - thereby also granting to themselves access to the business models of the independent service providers and control over the nature of data shared. Manufacturers argue that this is the only way to ensure security of the vehicle and the data.

Submissions by the independent service providers universally highlight how competition begins in the vehicle and that access and quality of data will in turn affect access to consumers and the quality of service provided (see here, here, here and here). They advocate that as an interim measure, the EC should ensure that independent service providers have access to the in-vehicle system and interface in a fair and non-discriminatory manner; and in the long term, an 'on-board application platform' should be introduced. This platform will make decentralised communication to/from the vehicle to multiple service providers possible and have the ability to securely run multiple applications concurrently; thus giving all players equal access to the data generated by the CAV and the consumer.

It is clear that the EC recognises access to data as an important aspect of ensuring competition in the automated vehicle sector but it remains to be seen what the nature of this access will be. This will be an important debate. To this end, the EC's reports on its public consultations on Recommendations on Connected and Automated Mobility and Shaping Competition in the Era of Digitisation (to be delivered by 31 March 2019) will be instructive and crucial in shaping competition in this sector. Companies active in this sector may wish to consider the possible scenarios from a competition perspective to ensure their approach is reflected in any EC policy and to avoid being caught by surprise if EC policy results in changes to their business model in the future.