Tech giants do not face enough competition, new report says

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Today, a panel of competition experts, headed by Professor Jason Furman, the former chief economic adviser of in the Obama administration, confirmed that tech giants, like Facebook, Amazon, Google, Apple and Microsoft, do not face enough competition.

Significantly, the report finds that control over personal data by tech giants is one of the main causes preventing competition and ultimately innovation.

Privacy International's research has shown clear examples of such data exploitation. We have long held that the digital economy is characterised by a few companies in dominant positions.

Because of their dominance, some companies are able to impose conditions on users. Because users’ data is a valuable commodity (a “proxy for price”), these conditions tend to include excessive and exploitative collection and processing of users’ personal data. In other words, the privacy harms are directly caused by the business models of companies in dominant positions which can impose excessive collection of data on people who have become “captive users.” 

This latest report criticises in particular how profiling may lead not only to "personalised pricing" but to exploitation of individuals. It notes how "businesses may use the data they hold about consumers to exploit known or inferred vulnerabilities, for example by personalising search rankings or targeting content.”

The report contains are various recommendations to break this vicious cycle, for example demanding strengthening of an antitrust regulator's powers to make it easier to prosecute breaches, including "bullying tactics" by big tech companies. These are welcome.

We agree with the recommendation for the UK Competition and Markets Authority (CMA) to open an investigation into the digital advertising market, a market that is shrouded in secrecy and open to abuse of our data.

As for forcing the big companies to provide access to their customers' data troves to other companies, we urge significant caution. Personal data is not just any other economic asset. Privacy and the protection of personal data are fundamental human rights. We believe that a limitation and other controls over the generation and collection of this data by these companies in the first place. This data enhances their dominant position and exploitation -- so limiting it should be the policy of first resort. This is why modern data protection laws like the EU General Data Protection Regulation recognise the right to data portability, and demand that individuals must be given the tools to be in control of their data. 

There is growing recognition among antitrust authorities and experts (for example Germany, the EU and the US) of the need to address the role of personal data in assessing market powers and the distortion of competition by companies like Facebook, Google, Amazon, and other tech giants.

Ultimately, antitrust must help to redress the imbalance of power between big tech companies and individuals, which have lost control of their data. This imbalance is increasingly affecting modern society at large and the functioning of democracy.

Privacy International recommends that competition regulators and policy:

  • 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.