Data Accumulation and the Privacy-Antitrust Interface: Insights from the Facebook Case

Abstract

The emergence of multi-sided media platforms occurred in parallel with the success of business models that revolve around the collection and use of personal data, generating revenue from user-data-based profiling and advertising. In such a context, data protection rules do not appear to be very effective, and thus the main privacy concerns relate to users' ability to control their digital identities. However, together with mere privacy issues, another concern lies at the heart of the debate about the data economy: that the collection and aggregation of data (including personal data) by dominant firms entrenches their dominant positions.

This paper discusses these issues by analysing the Facebook case initiated by the German Competition Authority. The Bundeskartellamt takes the view that Facebook is abusing its dominant position by leveraging its social network to amass, without limitation, a broad range of data generated by its users when they visit third-party websites. Facebook then merges this data with users' Facebook accounts. By focusing on these activities, the Bundeskartellamt takes the position that Facebook may use such data to optimize its commercial activity and tie more users to its network.

Based on a consideration of both EU and U.S. legislation, this paper will analyse the conditions under which the Facebook's conduct could fall within the scope of antitrust rules.

Keywords: Antitrust, Privacy, Big data, Facebook, Bundeskartellamt, Unfair practice

JEL Classification: D83, K21, L12, L4