New Government Task Force Zeroes in on Tech Regulation

In the United States, the debate continues about whether control of data is an antitrust or consumer protection issue — or both. Recent indicators show that the Federal Trade Commission, U.S. Department of Justice’s Antitrust Division and state regulators are taking action. The FTC’s new Technology Task Force, made up of agency lawyers in coordination with Consumer Protection Bureau and agency technologists, will examine technology-related matters including prospective and consummated technology mergers.

VentureBeat reports that, “one particular concern regulators have is that anticompetitive behavior could negatively impact consumer privacy.”

Last September, the DOJ assistant attorney general for antitrust Makan Delrahim hosted a meeting “with attorneys general from eight states and the District of Columbia and law enforcement representatives from five other states” to discuss whether technology companies “may be hurting competition and intentionally stifling the free exchange of ideas on their platforms” and to ensure protection of consumers’ data.

Antitrust laws are aimed to protect groups, whereas consumer protection laws cover harm to individual consumers.

Covering both sides is tricky: Antitrust laws don’t make it illegal for big tech companies to raise prices, and “competition theories should not be based on unfairness, which does not constitute harm to competition.” To make it more complicated, a two-sided market that serves consumers and merchants would have to prove harm to both sides for a viable antitrust claim to gain traction. For that and other reasons, “the focus of any merger analysis would likely be on whether the combination will reduce the incentives of merging entities to protect data.”

Thus far, “the FTC has not challenged a merger on the basis of a reduction in non-price competition over privacy protections, but it noted as far back as June 2015 that it has ‘explicitly recognized that privacy can be a non-price dimension of competition’.”

At Fall 2018 FTC hearings on “Competition and Consumer Protection in the 21st Century … panelists explained that it would be hard to prove a company’s data collection practices violate any antitrust rules.” The expert consensus, says VB, is that “acquiring or possessing big data, on its own, is not enough for regulators to show any violation.”

Even so, an October 1028 letter to the FTC from 11 states and the District of Columbia urged the FTC to “aggressively enforce the antitrust law at the ‘intersection between privacy, big data, and competition’,” arguing the “possible long-term anticompetitive harms arising from the aggregation of big data by a small number of dominant platforms.”

The state attorneys general also pointed out that “data aggregation can become a barrier to entry and prevent competition … in new lines of business, and perhaps particularly in the context of new services.”

The European Commission “and other European competition authorities” are also likely to continue their scrutiny of big tech companies, having “laid the groundwork for future antitrust investigations” and testing “antitrust theories by bringing enforcement actions against tech companies in Europe.”