Antitrust and Regulating Big Data
33 Pages Posted: 7 Sep 2016 Last revised: 13 Oct 2016
Date Written: September 4, 2016
The collection of user data online has seen enormous growth in recent years. Consumers have benefited from this growth through an increase in free or heavily subsidized services, better quality offerings, and rapid innovation. At the same time, the debate about Big Data, and what it really means for consumers and competition, has grown louder. Many have focused on whether Big Data even presents an antitrust issue, and whether and how harms resulting from Big Data should be analyzed and remedied under the antitrust laws. The academic literature, however, has somewhat lagged behind the policy debate, and a closer inspection of existing scholarly works reveals a dearth of thorough study of the issue.
Commentators generally are split into two camps: one in favor of more proactive antitrust enforcement in the Big Data realm, and one opposing such intervention, considering antitrust inappropriate for regulation of Big Data. The academic case for the former has not, as yet, been fully developed, and is relatively light at present. Meanwhile, policy-focused work by academics and practitioners in this arena suggests that antitrust intervention in Big Data would be premature and misguided, especially considering the myriad pro-competitive benefits offered by Big Data.
This article reviews the scholarly work on the implications of Big Data on competition, and considers the potential role of antitrust in the regulation of Big Data. Part I provides an overview of the scarce, academic literature specifically addressing the role of antitrust in Big Data issues. Parts II and III delve into the policy issues surrounding Big Data and whether it poses a risk to competition that warrants antitrust intervention. Part II details the ways in which Big Data may prove pro-competitive while Part III reviews and critiques the suggested potential harms to competition from Big Data. Part IV discusses the suitability of antitrust as the institutional choice for Big Data issues, and Part V concludes that, at present, antitrust is ill suited as the institutional choice. Further, the scholarly case for such harm has not yet been adequately established. Overall, this Article finds much noise as to potential “problems” around whether current antitrust tools and policy are adequate to deal with a Big Data “challenge.” In reality, there is no challenge at all, as the arguments for antitrust intervention when Big Data has come up as an issue have never carried the day for any merger or decided conduct case in any Department of Justice Antitrust Division (“DOJ”), Federal Trade Commission (“FTC”) or Directorate-General for Competition (“DG Competition”) to date.
Keywords: Antitrust, Big Data, Innovation, Online Markets, Network Effects, Online Search, Online Platforms, Platform Competition, Exclusion, Entry Barriers
JEL Classification: K21, L12, L40, L41, L42, L51, 030
Suggested Citation: Suggested Citation