Antitrust Source, American Bar Association, December 2014
12 Pages Posted: 14 Jan 2015
Date Written: December 1, 2014
Recently, there have been calls for antitrust intervention to address concerns related to big data, particularly big data consisting of personal information. According to these advocates, big data presents a significant entry barrier for online services that has led to entrenchment of large firms. They argue that large online firms should face antitrust liability for refusing to provide user data in their possession to rivals. Some also have urged the competition agencies to expand the concept of a relevant antitrust market to include data markets, even when those data are not marketed to customers.
We contend that, contrary to the views of these advocates, the acquisition and use of big data by online firms will rarely be captured by the antitrust laws. Online markets are notable for their low entry barriers and typically do not require big data for entry. Instead, most online service providers, including social media, search, and retail, use big data to improve their services once a customer base is established. As a result, the collection and analysis of big data have enhanced competition and improved product offerings. The notion that a company could monopolize or even have “market power” with respect to user data is implausible, given the ubiquitous and non-rivalrous nature of such information. In addition, proposals for relevant markets consisting of internally used data are inconsistent with longstanding and sensible precedent. Remedies that have been proposed to limit incumbents’ collection or use of big data or to require forced sharing with rivals are likely to harm competition and raise privacy concerns.
Keywords: Big data, user data, competition, Sherman Act, relevant market, entry barrier, search engine, social media
JEL Classification: K21, l40, L41, L42, L43, L44, L49
Suggested Citation: Suggested Citation
Tucker, Darren S. and Wellford, Hill B., Big Mistakes Regarding Big Data (December 1, 2014). Antitrust Source, American Bar Association, December 2014. Available at SSRN: https://ssrn.com/abstract=2549044