Pressure on Google Is Ramping Up. Could the Antitrust Probes Help Address Privacy Harms?
The antitrust pressure on Google is ramping up. The Department of Justice (DOJ) and state attorneys general are reportedly in digital advertising and online search, with . And abroad, Australia鈥檚 competition authority became the first regulator to in a preliminary decision issued last week; as its chairman observed, 鈥淏uying Fitbit will allow Google to build an even more comprehensive set of user data, further cementing its position and raising barriers to entry to potential rivals.鈥
Big Tech鈥檚 size, omnipresence, and surveillance power have long posed a growing threat to society. While many now see these companies as potential saviors in the , we must address the they present and examine how these companies amassed such power.
Mergers, by concentrating greater amounts of data within a single company, bear a significant share of the blame.
These issues are surfacing in , including the DOJ review of Google鈥檚 with Fitbit. that the to review the deal more closely鈥攇iving it an opportunity to assess about within an antitrust framework. Google already possesses a through its online search, digital advertising, and browser products, to name just a few. Adding such detailed, sensitive health data to the company鈥檚 purview (especially when it already has access to a ) helps it build more comprehensive, intimate profiles on users, amplifying its ability to profit off and influence internet users through targeted advertising.
Now, renewed attention on the of industry consolidation means that antitrust enforcers have a chance to weigh these concerns in evaluating the Google/Fitbit merger. This isn鈥檛 unprecedented鈥擥oogle鈥檚 2007 merger with DoubleClick , given the extraordinary combination of user data. At that point, the Federal Trade Commission (FTC) didn鈥檛 block the merger on privacy grounds: While advocates urged the FTC to address the privacy risks under its Section 5 mandate to take action against 鈥渦nfair and deceptive practices,鈥 antitrust enforcers are limited in their ability to consider privacy issues. The Commission majority explained that, in antitrust matters, it could only consider privacy as a competition issue, and arising from the deal. They also thought that imposing conditions on Google鈥檚 privacy practices鈥攊n effect, constraining the company while leaving competitors untouched鈥攃ould actually hurt competition.
Nevertheless, antitrust enforcers should consider whether a merger snuffs out existing or potential competitors with better privacy protections. They should give more weight to theories that concern future competition: Would one of the merging parties otherwise enter the market and make it more competitive? Mergers could thwart consumers鈥 ability to . The present antitrust framework allows for this possibility鈥攂ut because the theory involves potential developments, it鈥檚 difficult to meet current evidentiary standards.
Similarly, it鈥檚 hard to demonstrate evidence of privacy-based competition harms. For example, the Commission majority that Google and DoubleClick weren鈥檛 competitive restraints on each other鈥攖hey didn鈥檛 significantly influence one another鈥檚 prices or product attributes, like privacy protections. However, DoubleClick had been developing an ad exchange product to compete with Google鈥檚 AdSense.
Over the past two decades, tech giants have that weren鈥檛 direct competitors鈥攁nd, if Google鈥檚 endeavor to buy Fitbit is any indication, they have no intention of stopping. Antitrust enforcers should preserve competition on privacy鈥攅specially because data can entrench a company鈥檚 dominant position in the market.
Antitrust authorities should consider whether consolidating data within a single company gives it a unique competitive advantage. The Commission majority in Google/DoubleClick 鈥攐ther competitors had their own data troves to tap into鈥攁nd that Google鈥檚 data collection didn鈥檛 inhibit competitors鈥 ability to collect data. In fact, they that competitors鈥 data concerns 鈥渞eally amount[ed] to a fear that the transaction [would] lead to Google offering a superior product鈥; while data may not be essential, companies could use it to develop a 鈥渂etter鈥 product. So, while 鈥減rivacy can be an important dimension of quality,鈥 as DOJ antitrust head Makan Delrahim last June, it鈥檚 difficult to determine if a company鈥檚 data practices are anticompetitive, or just an effort to improve product quality.
It would be misguided, however, to ignore the that data gives to companies reliant on behavioral advertising. has recognized data as 鈥渢he essential factor 鈥 establishing [Facebook鈥檚] dominant position鈥; the country鈥檚 Federal Court this thinking earlier this week. in order to collect more data about them. Social network users, too, aren鈥檛 inclined to switch services. It鈥檚 nearly impossible for competitors to appeal to customers and begin collecting their own data.
U.S. enforcers might be moving toward this analysis. Delrahim has that, whereas users can theoretically give their data to multiple companies, usage data (information about how individuals use a product) is unique and cannot be easily replicated by competitors. By shedding insight into user preferences, usage data provides companies with key competitive advantages in improving their products in ways that competitors can鈥檛. This feedback loop can make it more difficult for new entrants to compete against incumbents鈥擜mazon, for instance, is allegedly on its platform to launch competing products, giving it an unfair advantage.
Google/Fitbit might illustrate the dangers of allowing these dynamics to proliferate unchecked. Antitrust enforcers have the opportunity to apply lessons from Google/DoubleClick to this pending merger. In evaluating the Google/Fitbit deal, they should assess whether it would eliminate potential competition or consolidate data such that it would be harder for companies to compete. Ultimately, blocking the merger on competition grounds could help pave the way for a fairer tech landscape鈥攐ne with more players vying to create the best possible experience for their users.