Introduction
This essay examines whether the conduct of Your Health Germany GmbH, a subsidiary of the multinational pharmaceutical company Your Health Inc, breaches European Union (EU) law. Specifically, it focuses on the company’s dominant market position in antiviral herbal medicines and its data-driven practices via the Your Health Online platform. With Your Health Germany controlling 39% of the EU market and engaging in targeted advertising based on user data, questions arise regarding potential infringements of EU competition law and data protection regulations. This analysis will explore two key areas: competition law under the Treaty on the Functioning of the European Union (TFEU) and data protection under the General Data Protection Regulation (GDPR). The essay aims to advise Michael, a director of Your Health Inc, on the legal risks associated with these practices.
Competition Law Concerns under the TFEU
Under EU competition law, specifically Article 102 of the TFEU, abuse of a dominant position is prohibited if it affects trade between member states. Your Health Germany’s 39% market share in antiviral herbal medicines within the EU, while significant, does not automatically constitute dominance. However, when combined with the parent company’s 70% global market share and the control exerted over EU operations, it is arguable that dominance could be established (Whish and Bailey, 2021). The threshold for dominance often considers market share alongside barriers to entry and competitive constraints. Given the specialised nature of antiviral herbal medicines and limited competition (with No Virus Ltd holding only 30% of the EU market), barriers to entry appear high, potentially reinforcing dominance.
Furthermore, the expansion of the Your Health Online platform to consumers and its use of data to track end users for advertising purposes may constitute abusive conduct. If such practices exclude competitors by leveraging data insights unattainable to smaller firms, this could be seen as an abuse under Article 102 TFEU. For instance, using platform data to undercut prices or prioritise Your Health products over competitors might distort competition. While no direct evidence of exclusionary behaviour is provided, the potential for such abuse warrants caution, as the European Commission has prioritised scrutiny of digital platforms in recent years (European Commission, 2020).
Data Protection under the GDPR
The GDPR, implemented in 2018, imposes strict obligations on companies processing personal data within the EU. Your Health Germany’s tracking of end users outside the platform and use of this data for targeted advertising raises significant concerns. Under Article 6 GDPR, processing personal data requires a lawful basis, such as explicit consent. If users are unaware of or unable to opt out of such tracking, this likely breaches GDPR principles of transparency and consent (Voigt and von dem Bussche, 2017). Additionally, the sensitive nature of health-related data—categorised as ‘special category data’ under Article 9 GDPR—demands even stricter safeguards. Failure to comply could result in substantial fines, as seen in recent enforcement actions by EU data protection authorities.
Moreover, the cross-border nature of the data processing (involving users across Europe and America) complicates compliance with GDPR’s territorial scope. Your Health Germany must ensure it adheres to rules on international data transfers, particularly if data is shared with Your Health Inc’s US headquarters. Without adequate safeguards, such as Standard Contractual Clauses, this could constitute a further breach (European Data Protection Board, 2021).
Conclusion
In conclusion, Your Health Germany’s conduct raises potential breaches of EU law in two key areas. Under competition law, while market dominance is not conclusively established, the risk of abusing a dominant position through data-driven practices on the Your Health Online platform remains a concern. More critically, under the GDPR, the tracking and use of personal data for advertising without explicit consent likely violates EU data protection rules. Michael should be advised to review the company’s data practices urgently, ensuring compliance with GDPR through transparent consent mechanisms and secure data handling. Additionally, a competition law assessment is recommended to mitigate risks of abusive conduct. Failure to address these issues could result in significant legal and financial consequences for Your Health Germany and its parent company.
References
- European Commission. (2020) Competition Policy for the Digital Era. European Union.
- European Data Protection Board. (2021) Guidelines on the Territorial Scope of the GDPR. EDPB.
- Voigt, P. and von dem Bussche, A. (2017) The EU General Data Protection Regulation (GDPR): A Practical Guide. Springer.
- Whish, R. and Bailey, D. (2021) Competition Law. 10th edn. Oxford University Press.
