Antitrust and privacy are on a collision course
Here’s something for you finish the puzzle. In December, the Federal Trade Commission and a coalition of states filed antitrust lawsuits against Facebook, saying the company was dominant and less competitive, as it refused to make commitments to protect users ’privacy. In March, a coalition of other states, led by Texas, accused Exclusive behavior associated with Google’s plan to remove third-party cookies in Chrome. In other words, one technology giant is being prosecuted for weakening privacy protections and strengthening another. How can this be?
This question and others like it will become increasingly urgent in the coming years. Anti-monopoly executives are filing cases against major technology companies while states pass new privacy laws and Congress prepares for its own approval (perhaps, perhaps hopefully). Meanwhile, these companies are making all sorts of changes to their privacy policies, even as government lawyers approach them. If politicians and executives can’t figure out the right way to think about how to reconcile the privacy law and the competition law, they are in danger of both fucking wrong.
To win a monopolization lawsuit under Section 2 of the Sherman Act, the government must prove that the company is not only a monopoly, but has used its power to harm consumers because it is nowhere to do things that can only escape it. otherwise go. (This controversial rule is called the “consumer welfare standard.”) This is a typical example when a major company raises prices in the market. Since Facebook’s main products are free, this argument won’t go against that. But there is another way to show the impact on consumer welfare: to reduce the quality of the product. That’s the role that privacy plays Facebook case. According to the lawsuit, eroding user privacy over time is a way to harm consumers – a social network that protects less user data is a smaller product – from Facebook becoming a mere monopoly to being illegal. (This allegation that the company denies is just one of the anti-monopoly claims raised against Facebook.)
This anti-Facebook argument shows the main theory that shows how antitrust and data privacy intersect: When you turn on the competition marker, you get more privacy because the company will try to take care of customers by offering better protections. If a market is monopolized, that incentive to compete disappears.
Sometimes, however, the relationship between privacy and competition is reversed: when you turn on privacy marks you get less variety in the market. This is increasingly the case, as most monopolistic companies are often the ones that make the most extensive and profitable use of personal data. In March, Google announced As Chrome’s third-party followers blockchain plan progressed, its global market share was in the range of 60 percent. Under the Privacy Sandbox framework, instead of targeting ads based on cookies, Google said it will implement a new tracking system for the browser and provide ads to users based on the cohorts they enter instead of targeting them individually.
On the face of it, it’s a breakthrough for privacy. Deleting cookies will make it difficult for strangers to access your personal data. According to Texas, however — and a dozen experts I’ve discussed with the subject — the Privacy Sandbox will increase Google’s tremendous position in the advertising market. By cutting the ability of other companies to track users in Chrome, while retaining that power, the company will add a huge advantage to user data and make it even harder for competing companies and publishers to compete for advertising dollars.