Can Exchanges of Anonymized Disaggregated Data Facilitate Collusion?
19 Pages Posted: 16 Apr 2024
Date Written: March 15, 2024
Abstract
The exchange of information among competitors poses inherent risks to competition. Antitrust guidelines favor aggregated data exchanges and endorse anonymization as a safeguard against collusion. However, the impact of data aggregation and anonymization on collusion remains relatively underexplored in the economic literature. This paper examines whether exchanging disaggregated data increases the risk of collusion compared to aggregated data exchanges, under the assumption that firms lack full control over production decisions and are subject to random production shocks. Our analysis reveals that exchanging disaggregated data reduces the discount rate necessary for collusion, relative to aggregated data exchanges. Furthermore, data anonymization may not effectively prevent collusion when firms exchange disaggregated data for monitoring purposes. These findings underscore the importance of antitrust guidelines favoring aggregated data exchanges and highlight the limited role of data anonymization in preventing collusion.
Keywords: collusion, information exchanges, aggregated data, disaggregated data, anonymization, production shocks
JEL Classification: K21, L13, L41
Suggested Citation: Suggested Citation