In the digital economy there is a trend towards corporate concentration. This is particularly true for digital platforms, such as social media platforms, search engines, digital entertainment, or online retailers. Traditionally, the way in which market dominance is measured does not always capture the extent of these companies' market power, as their products and services are often ‘free’ to consumers.

This trend is fuelled by the increasing reliance by many sectors of the economy on data, particularly personal data. In the digital economy, the value of personal data increases as more and more data is combined, and this incentivises companies to pursue business strategies aimed at collecting as much data as possible. With the development and integration of artificial intelligence technologies, it is likely that users’ data will become even more important for companies, since their data is an essential input to train AI models. And given the growing importance of data across all sectors, the concentration is likely to continue and expand to other markets.

What is the problem

The effects of this concentration of power are significant, and they are not limited to online and offline privacy. Companies like Google act as gatekeepers, for example by regulating how we access information on the web as well as which applications we can install on our devices. They can track and profile us across devices to predict and influence our behaviour. This is no longer ‘just’ affecting the realm of digital advertising. Increasingly corporate powers encroach on the functioning of democracy and have profound societal impacts.

A vicious cycle is at play: because of their dominance, these companies collect and analyse vast amounts of data. The more data they collect, the better they become at profiling individuals and offering these profiles to advertisers, political parties, and others, as well as using those profiles to improve the attractiveness of their own services. And the more people are drawn into these services, the less any individual user has the power to opt out of the corporate data exploitation model because no equivalent service exists.

When assessing market power, competition authorities have tended to focus on price and outputs. This narrow approach gives little to no consideration of other factors, such as consumer welfare, quality, innovation, and privacy; and the interaction between the different relevant markets at play.

What is the solution

Effective competition makes sure that companies have an incentive to invest, innovate, keep up with their rivals, and to come up with new and better products for consumers.

In order to begin to challenge this exploitation of data for power, we need to:

  • Assess companies’ powers in relation to personal data, focusing not only on price, but on quality of service, innovation, and privacy.
  • Heighten control over mergers and acquisitions initiated by big companies, including by assessing impacts on data.
  • Create the conditions for genuine competition on privacy, where companies compete to provide the most privacy friendly services.
  • Address the harm that derives from lack of competition, including by adopting analyses of market powers that take into account societal concerns as well as economic aspects.
  • Coordinate enforcement across antitrust authorities and other regulatory bodies, such as data protection authorities, to avoid loopholes, and a ‘race to the bottom’.
  • Empower human rights and consumer organisations to question market dominance which negatively affect individuals’ rights.

What is PI doing

PI advocates for meaningful control of the data exploitation industry; explores policy solutions that put people in control of their personal data; and actively intervenes in discussions on reform of antitrust/competition law and regulation.

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