A recent Pew study found that ninety-one percent of Americans say that they have “lost control” over how their personal information is collected or used by companies.  Given that privacy trade-offs are so clearly a concern for the vast majority of Americans, it’s strange that there are no viable alternatives to the Internet giants that provide services free of charge, but at a heavy cost to our privacy. 

So why is it that the market has not responded to the privacy concerns that are so prevalent among American consumers?  One major reason is that our own antitrust authorities are not looking at the amassing of data. Privacy and competition issues shouldn’t neatly fall into distinct compartments – but most enforcers have blithely left them there.

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The Department of Justice and Federal Trade Commission view privacy and competition as unrelated issues. For example, they typically consider a merger’s effect on price.  But price is less relevant when the product is offered for free, at least from a monetary perspective, but the consumers pay by divulging their personal information.  

When a company whose business model depends on the collection and monetization of consumer data becomes so firmly entrenched, so dominant in a given market, that it has both the ability and incentive to squelch competition – competition that may challenge that data-dependent business model – the incentive to innovate and take on the established giants is diminished. 

So, the harm is not necessarily higher price, but the loss of quality, innovation and privacy.  If the tech giant can squeeze out its smaller rivals, consumers are left with less choice, less privacy, and poorer quality products and services. 

It’s against this backdrop that the tech titans are now furiously downplaying the importance of data. Just recently, the chairman of one of the world's largest collectors of personal data recently told a room full of executives, economists, and scientists that, “Our experience is that you don’t need data to compete online.”  

That’s befuddling, since Google and other tech giants have been openly talking for years about how important data was to their business model and their success in harvesting it. But now, they’re determined to divorce Big Data from competition policy. Shrugging off the importance of data has become their way of avoiding antitrust scrutiny. 

That represents a big shift in thinking. Until recently, competition authorities and experts did not believe that Big Data raised antitrust concerns. But that is changing, and European law enforcement and consumer protection authorities are leading the way.  This October, the European Union’s newly-minted antitrust chief, Margaret Vestager, dubbed personal data as the “new currency of the Internet,” and vowed to focus on how its large-scale collection entrenches the strength of big tech companies. 

We cannot afford a widening enforcement and policy gap with our European counterparts.  Such a gap leaves our enforcers ill-equipped to identify and address the anticompetitive risks and privacy harms from data-driven mergers, subjects our companies to inconsistent enforcement, and leaves consumers and startups vulnerable. 

One solution is to look back. The agencies, while predicting a proposed merger’s likely competitive effects, seldom revisit the merger several years later to see whether they predicted accurately.  The agencies should revisit significant data-driven mergers to see if any turned out badly for consumers.  Did the merger enable the tech giant to entrench or further increase its market power?  Did the merger help shut out firms from entering the market?  In undertaking these merger retrospectives, the competition agencies can assess whether their current tools are good at predicting the effects of data-driven mergers.  If the agencies have a lousy batting average, they need better predictive tools.  To develop these tools, the agencies can assess whether the earlier anticompetitive mergers shared certain features that enabled them to exercise market power.    

Big data raises many potential benefits and concerns. Competition law plays an integral role to ensure that we capture the benefits of a data-driven economy while mitigating its associated risks. Whatever the merits of a Google break-up, the United States cannot chastise the EU for politicizing antitrust, while it remains ignorant of data’s competitive risks. The U.S. competition authorities must take the lead in recognizing data’s importance and the implications of a few firms’ unparalleled system of harvesting and monetizing their data trove.  We cannot and should not rely on the Europeans. 

Stucke and Grunes, both former attorneys with the Department of Justice’s Antitrust Division, are the co-founders of the Washington, D.C.-based Data Competition Institute.