Assistant Attorney General of the U.S. Department of Justice (DOJ), Antitrust Division, Makan Delrahim recently spoke at the University of Chicago’s Antitrust and Competition Conference and discussed how U.S. antitrust law should treat “big data.”  According to Delrahim, antitrust law is “flexible enough to address competition issues from emerging platforms,” including large tech companies like Google and Facebook that possess significant market share within their lines of business and simultaneously aggregate vast sums of personal data from consumers.

Noting that consumers are increasingly indicating a “revealed preference for personal data privacy in the digital economy,” Delrahim stated that data privacy protections are essentially a commodity and that antitrust enforcers should approach them like any other product consumers purchase.  At the same time, Delrahim acknowledged that enforcers must determine whether large tech companies have the ability to thwart competitors who might offer consumers better data protection.

In his remarks, Delrahim did not address current events, such as Cambridge Analytica obtaining personal data from nearly 87 million Facebook users, but did acknowledge concerns that antitrust law should significantly reign in aggregators of personal data.  According to Delrahim, some argue that enforcers should “simply . . . declare that data is the new digital currency, that online platforms have been exploiting data without consent, that loss of information control is anti-competitive, and then impose eye-popping penalties by multiplying some measure of data value by the size of the consumer base.”

Delrahim pushed back firmly against that approach, saying that it was not “evidence-based.”  Rather, Delrahim argued that data privacy is itself a valuable commodity, and that consumers should be able to bargain for it from companies that aggregate and collect their personal data.  In other words, consumers make rational choices about whether, for example, the benefits of joining Facebook adequately compensate them for the personal data they share with the company in order to do so.

Building on that observation, Delrahim contended that consumers may now be demonstrating a stronger preference for data privacy protections than in years past and that, as a result, “the mentality regarding free platforms may well be changing.”  Thus, he said, antitrust enforcers should avoid interfering with the competitive process by which companies develop data privacy protections and consumers evaluate whether they are willing to accept those protections in exchange for sharing their data.  Instead, enforcers should analyze whether large tech companies might possess such large market shares in their lines of business that they lack sufficient incentives to offer data privacy protections that match or beat protections that rivals could develop.

It remains unclear whether antitrust enforcers in the U.S. (i.e. the DOJ-Antitrust Division and the FTC) will conclude that significant barriers to competition in the development of data privacy platforms do exist.  Delrahim’s remarks indicate that this is a question to monitor closely in the future.

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