AAI Issues Report: Privacy and Antitrust at the Crossroads of Big Tech

A new report from the American Antitrust Institute, Privacy and Antitrust at the Crossroads of Big Tech, explores the increasingly complex relationship between competition and privacy in the context of Big Tech.  The burgeoning growth of surveillance capitalism business models is leading to interactions between competition policy and privacy principles that reveal surprising synergies, gaps, and conflicts in what was once assumed to be a straightforward and symbiotic relationship.

This report investigates and unpacks this intersection between privacy principles and antitrust law.  It rejects the notion that aggressive enforcement of the antitrust laws, alone, will provide a complete solution to modern privacy concerns.  Absent a legal framework allocating and defining privacy rights, market-based tools, such as antitrust law and competition policy, are of limited utility in guaranteeing optimal levels of privacy.  Moreover, market forces cannot account for the strong public interest in data privacy, which must be separately addressed through other legislative and policy tools.  Finally, numerous market failures surrounding privacy and limitations in current antitrust tools make antitrust an incomplete tool for policing privacy concerns.

The report further explores how, despite these challenges, antitrust law and competition policy can and should be used to guard against competition-based privacy harms.  Competitive markets for the consumer goods and services supplied by surveillance capitalists, protected by strong antitrust laws, provide consumers with the ability to walk away from companies that exploit their data and invade their privacy, providing a critical countervailing force to the incentives these companies otherwise face to harvest and exploit consumer data.  Aggressive merger policy that recognizes the threat of market power and anticompetitive harm posed by the aggregation of personal data is also integral to competition and privacy.

Finally, the report delves into the potential conflict between privacy laws and principles and antitrust laws and competition policy.  It discusses areas of potential discord, and highlights the need for antitrust and privacy policymakers to engage with one other to minimize negative interactions between these areas of law, to design thoughtful laws and policies that account for potential conflicts, and to make considered policy choices where conflict cannot be entirely avoided.

Principal policy recommendations of the report include:

• Legislators and policymakers must move beyond notice-and-consent privacy regimes toward direct regulation of consumer data collection or strong property rights of consumers in their data.
• In crafting privacy legislation and rules, legislators and policymakers should account for potential impacts on competition.
• Antitrust complaints about the deployment of privacy practices and tools must be evaluated on the basis of their competitive impact.
• Antitrust enforcers, legislators, and policymakers should develop mechanisms to better account for privacy harms as anticompetitive effects.
• Antitrust enforcers, legislators, and policymakers should continue to develop merger policy that accounts for stores of personal data as a source of market power and degradation of privacy as an anticompetitive effect.

The report was authored by Laura Alexander, AAI’s Vice President of Policy, and was supported by a grant from the Omidyar Network Fund, Inc.