Antitrust, Privacy, and Digital Platforms' Use of Big Data: A Brief Overview

Abstract

The role of data in the provision of services on digital platforms has been attracting a lot of attention by consumers, businesses, and regulators alike. Data collection and usage is becoming central to many digital platforms, some of which reach and connect hundreds of millions of users. While these businesses have become significant conduits for commercial and social interactions, there are concerns that the access and management of user data is further cementing their power over many aspects of business - to - consumer relations. This article discusses the current challenges that extensive data collection and usage pose for antitrust regulators that aim to preserve competition and service quality for users. After describing the factors underpinning the success of many digital businesses, which include the efficient use of data, we discuss the relation between data, market power, and market entry as well as the implications for merger review. We also assess the relation between data, foreclosure and monopolization. Finally, we discuss the extent to which antitrust regulation may be useful in addressing online privacy concerns. We conclude that the impact of data collection on the competitive environment is not subject to generalizations and must in all instances be subject to a case-by-case assessment. Moreover, because data collection simultaneously affects a variety of interdependent activities on a platform, regulators should take into account the multi-sided nature of digital businesses. We also find that antitrust is probably not the right instrument to address issues raised by privacy concerns.

Keywords: Technology, Digital Platforms, Antitrust, Competition, Business Models, Big Data, Innovation

JEL Classification: K21, L2, L4, L5