The Commission has informed Insurance Ireland, an association of Irish insurers, of its preliminary view that it breached EU antitrust rules by restricting competition in the Irish motor vehicle insurance market. The Commission takes issue with certain conditions of access to the Insurance Link platform, a data sharing system, which Insurance Ireland administers. The Commission considers that Insurance Ireland arbitrarily delayed or de facto denied access to the system to companies that had a legitimate interest in joining it, and that hurdles remain in place that might affect companies seeking to enter the Irish motor insurance market.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Motor insurance is a significant cost in the budget of every family and business. Access to data is key for insurers to evaluate the risk they take and to offer competitive contract conditions to customers. We have concerns that certain insurers and their agents were put at a competitive disadvantage because Insurance Ireland denied or delayed access to its data sharing system, compiling valuable information on insurance claims. This prevented competitive entry of new players and thus reduced Irish drivers’ choice of motor insurance policies at competitive prices. Non-discriminatory access to data sharing systems is important to foster competition in markets relying on data.”
Statement of Objections in relation to Insurance Ireland’s conditions of access to Insurance Link
Insurance Ireland is an association of companies active in the insurance sector in Ireland and covers over 90% of the Irish motor vehicle insurance market. Insurance Ireland administers and sets the conditions of access to Insurance Link, which comprises a non-life insurance claims data pool and a facility for Insurance Link users to request certain data about such claims. Insurance Link enables its users – companies offering motor vehicle insurance – to better assess risk and to detect and defend themselves against potential fraud.
The Commission’s preliminary findings show that Insurance Ireland arbitrarily delayed or de facto denied the access of certain insurers and their agents to Insurance Link. Since at least 2009 and until today, access has been linked to membership in the association. Thus, applicants have to first be eligible for membership, meet membership criteria and go through an unpredictable application process. For several years, certain types of insurers and their agents were not eligible for membership and were therefore effectively denied access. The obligatory membership criteria delayed access for some companies for several years.
The Commission’s preliminary view, outlined in its Statement of Objections, is that lack of access to Insurance Link has the effect of placing companies at a competitive disadvantage on the Irish motor vehicle insurance market in comparison to companies that have access to the database. This affects negatively costs, quality of service and pricing. It also acts as a barrier to entry and thus reduces the possibility of more competitive prices and choice of suppliers. Lack of access to the relevant data contained in Insurance Link also has an effect on cross border trade between Member States, resulting in the potential partitioning of the Single Market.
If confirmed, this would infringe Article 101 of the Treaty on the Functioning of the European Union (TFEU). The sending of a Statement of Objections does not prejudge the outcome of an investigation.
Background on data pooling and data sharing arrangements
Depending on their design, data sharing arrangements may contribute to the efficient functioning of insurance markets. In the era of digitalisation and data reliance, data pooling and data sharing arrangements may contribute to effective competition in other sectors too. Ensuring that such arrangements, including their access conditions, are compliant with competition rules is thus of importance. The European data strategy reflects these principles. In the roadmap for the impact assessment of the revision of the Guidelines on the applicability of Article 101 TFEU to horizontal cooperation agreements, the Commission recently announced that it intends to include guidance that would assist stakeholders in the self-assessment of data pooling and data sharing arrangements.
Background on procedure
Article 101 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.
The Commission opened the in-depth investigation into Insurance Ireland’s data sharing system on 14 May 2019.
A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned, in writing, of the objections raised against them. The addresses can examine the documents in the Commission’s investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. Opening a formal antitrust investigation and sending a Statement of Objections does not prejudge the outcome of the investigations.
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.
More information on the investigation is available on the Commission’s competition website, in the public case register under the case number AT.40511. A periodic compilation of antitrust and cartel news is available in the Competition Weekly e-News.