Should We Be Concerned About Data-opolies?

Abstract

With the rise of a progressive antitrust movement, the power of Google, Apple, Facebook, and Amazon is now topical. This article explores some of the potential harms from data-opolies. Data-opolies, in contrast to the earlier monopolies, are unlikely to exercise their power by charging higher prices to consumers. But this does not mean they are harmless. Data-opolies can raise other significant concerns, including less privacy, degraded quality, a transfer of wealth from consumers to data-opolies, less innovation and dynamic disruption in markets in which they dominate, and political and social concerns.

Data-opolies can also be more durable than some earlier monopolies. Moreover, data-opolies at times can more easily avoid antitrust scrutiny when they engage in anticompetitive tactics to attain or maintain their dominance.

The United States Department of Justice has brought only one monopolization case under Section 2 of the Sherman Act in the past decade. This abdication is not justifiable going forward, given the risks posed by these data-opolies, whose abuses can affect not only our wallets, but also our privacy, autonomy, democracy, and well-being.

Keywords: Monopoly, Antitrust, Big Data, Network Effects

JEL Classification: K21, L40, L41