Ten years ago, few Facebook users gave a second thought to posts revealing which new restaurant they tried over the weekend. Or taking quizzes that determined which celebrity they might have been in a previous life.
Now that users realize that information is sold to advertisers for a handsome fee and used to pitch new restaurants, movies and even clothes and cars to them, some feel differently, said Makan Delrahim, the assistant attorney general for antitrust enforcement appointed by President Trump.
Such concerns, fueled by the revelation that a consultant linked to Trump’s 2016 campaign improperly accessed Facebook data to sway voters, has prompted an “arms race” to impose new regulations on large digital-platform operators that aren’t well thought-out and may do more harm than good,” Delrahim said in a Thursday speech at the University of Chicago.
Urging the U.S., for instance, to simply “declare that data is the new digital currency, that online platforms have been exploiting data without consent, that loss of informational control is anti-competitive, and then impose eye-popping penalties” misses the reality that not all consumers value data the same way,” Delrahim said.
“Money has face value, but privacy cannot yet be measured in nominal terms, and varies according to the type and utility of the data used,” he added. A more effective strategy would be ensuring that potential competitors can break into the market for a particular platform and that consumers who prefer already-established services still have access, Delrahim said.
He’s not yet convinced that current antitrust enforcement’s approach, which relies on consumer welfare as its lodestar and frequently uses price as a gauge of harm, can’t properly respond to the risks posed by companies like Facebook and Google, which are free, and Amazon, which dominates e-commerce in part through lower prices than bricks-and-mortar competitors.
“There is no persuasive evidence that antitrust itself has ‘failed,'” Delrahim said. “Over the past several decades, antitrust law has responded to new and innovative products and markets to protect against novel threats to the competitive process. Enforcement agencies have developed a strong expertise as new types of assets emerge and consumer preferences shift.”
The landmark case that the Justice Department filed against Microsoft in 2001 is one example demonstrating how the current approach can be adapted to new types of assets and markets — computer code and software, in that case — he said.
“The antitrust laws are flexible enough to address competition issues from emerging platforms,” Delrahim argued. “We must demand hard evidence of anticompetitive harm before rushing to condemn as unlawful business practices that fuel innovation and thus dynamic competition.”
The assistant attorney general’s remarks offer additional insight into the tools the government might bring to bear against Big Tech, as concerns about the power of mammoth digital firms grow among lawmakers, the Trump administration, and free-market advocates.
Such advocates, including the so-called hipster antitrust movement who want to break up the companies, don’t cite the companies’ mammoth size as the driving reason to break them up, even though Google’s $718 billion market value makes it the largest publicly traded company in the U.S., and Amazon and Facebook are comfortably in the top 10.
A critical question instead is the tech giants’ control of platforms that give them a powerful advantage over business customers who are, at times, competitors. Facebook’s social media apps and Amazon’s e-commerce site are prime examples.
