Antitrust: Commission opens investigation into Insurance Ireland data pooling system
The European Commission has opened a formal antitrust investigation into Insurance Ireland to assess whether the conditions of access to its Insurance Link data pooling system may restrict competition, in breach of EU rules.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Insurance is essential for all car drivers in Europe. We are investigating whether companies wishing to offer their services on the Irish motor insurance market may have been unfairly prevented from accessing a data pool managed by Insurance Ireland for its member companies. This could potentially reduce Irish drivers' choice of motor insurance policies at competitive prices."
Insurance Ireland is an association bringing together several member companies active in the insurance sector in Ireland. Insurance Ireland administers and makes available to its member companies the Insurance Link database. The member companies contribute insurance claims data to the database on an ongoing basis.
The stated purpose of the system is to facilitate the detection of potentially fraudulent behaviour by insurance claimants and to ensure the accuracy of information provided by potential customers to insurance companies and/or their agents. The Commission does not question that data pooling arrangements can contribute to effective competition. The participation in and access to a data pool by insurance service providers may directly benefit consumers in terms of ensuring more suitable products and competitive prices.
In the case of Insurance Ireland, the Commission's investigation will assess, in particular, whether the conditions imposed on companies wishing to participate in and access the Insurance Link database may have had the effect of placing these companies at a competitive disadvantage on the Irish motor insurance market in comparison to companies already having access to the database.
If proven, the practices under investigation may breach EU competition rules, which prohibit agreements between companies that prevent, restrict or distort competition within the EU's Single Market (Article 101 of the Treaty on the Functioning of the European Union (TFEU)).
The opening of the formal investigation follows inspections carried out in July 2017 in the Irish motor insurance market.
The Commission will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.
Insurance Ireland is an association of undertakings. Its members include insurance companies and agents active in the insurance sector in Ireland.
A data sharing system which involves an element of reciprocity, whereby at least some companies contribute data, is called a “data pool”. Data pooling arrangements are often pro-competitive. Participation in and access to a data pool by service providers may directly benefit consumers by enabling effective competition on the market. By accessing and participating in a data pool, service providers may be able to offer better prices and services to consumers. Access to data within a data pool may also enable effective market entry and thus may result in improved choice of services and suppliers to the benefit of consumers.
However, in some situations, data pooling arrangements may lead to restrictions of competition. This may be the case, for example, where the conditions of access to and participation in a data pool result in placing certain market operators at a competitive disadvantage or where the data pooling system enables market operators to become aware of the market strategies of their competitors.
In its Guidelines on horizontal cooperation agreements, the Commission provides the general principles on the competitive assessment of information exchanges between companies active on the same market. In the next few months, the Commission intends to launch a review of these guidelines to ensure that the guidance provided continues to give market operators the tools to assess their cooperation agreements. This review takes place in the context of the upcoming expiry of the Research & Development Block Exemption Regulation and the Specialisation Block Exemption Regulation.
Background on antitrust investigations
Article 101 of the Treaty on the Functioning of the European Union (TFEU) prohibits anticompetitive agreements and decisions of associations of undertakings that prevent, restrict or distort competition within the EU's Single Market. The implementation of this provision is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities
Article 11(6) of the Antitrust Regulation provides that the opening of proceedings by the Commission relieves the competition authorities of the Member States of their competence to apply EU competition rules to the practices concerned. Article 16(1) further provides that national courts must avoid adopting decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated.
The Commission has informed Insurance Ireland and the competition authorities of the Member States that it has opened proceedings in this case.
There is no legal deadline for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.