The United Kingdom’s Digital Competition Expert Panel released its report, “Unlocking Digital Competition,” to the government yesterday. The report proposes policies that it says, “would create substantial benefits for UK consumers, businesses trying to start up and scale up in the UK, and greater predictability for the major digital companies.” The report argues that competition law and policy in the UK needs to be updated to address the current problems in the digital economy, but that additional tools beyond competition policy will have the biggest impact. “Strengthened antitrust enforcement, although having an important role, moves too slowly and, intentionally, resolves only issues narrowly focused on a specific case.”
On Friday, I was heartened to see Senator Elizabeth Warren enter the digital platform competition debate in a big way. Her proposal has already generated a ton of great conversation about how digital platforms ought to be regulated. The agenda-setting role of presidential candidates is significant, and I’m so glad this important topic is on the agenda now. The proposal includes more wonky detail than many campaign proposals, though of course, it is not fully drafted legislation. I want to take this opportunity to discuss the proposal in depth and think about how policymakers can move forward from here. Congress should start now on providing the additional analysis that is generally needed before any specific action is taken.
It seems almost every week there are new revelations about Facebook’s data use and sharing policies. The Federal Trade Commission is currently investigating Facebook for a potential consent decree violation related to the release of user data to Cambridge Analytica. The new allegations of data misuse in the New York Times this week may also be a violation of the consent decree. They are at least worthy of FTC investigation. And the cache of previously sealed litigation documents published by a British Member of Parliament earlier this month seem to indicate that Facebook may have been strategically withholding this valuable data from “strategic competitors” such as upstart Vine. Taken together, the two stories paint a frightening picture. Was Facebook granting access to private user data to cement its market position, offering it up to the powerful and wielding it as a cudgel against potential competitors? At the close of the current investigation, the FTC should demand remedies that protect users’ privacy while encouraging competition on the Facebook platform and against Facebook itself.
Last night, The New York Times reported on its investigation of widespread data sharing practices between Facebook and over 150 major tech companies. Despite a consent decree with the Federal Trade Commission prohibiting Facebook from sharing customer information without consent, and despite auditing mechanisms in the consent decree designed to spot practices that shared customer information in violation of the decree, the practices continued for years. The New York Times article suggests that some of the information sharing may still be going on to this day.
Remember when Sinclair Broadcasting Group tried to buy Tribune Media? That merger would have allowed Sinclair to reach 72 percent of U.S. households -- far, far above the Federal Communications Commission’s 39 percent audience cap. Fortunately for consumers, Tribune backed out of the deal after the FCC signaled it was unwilling to approve the transaction as structured.
Tomorrow, Public Knowledge President and CEO Gene Kimmelman will join a Federal Trade Commission hearing on vertical mergers, and a second hearing on the consumer welfare standard in antitrust law. During the first hearing, Mr. Kimmelman will discuss Public Knowledge’s prior advocacy for strong enforcement in vertical merger reviews, and how the Vertical Merger Guidelines must be changed to be more effective in promoting competitive markets. During the second hearing, Mr. Kimmelman will discuss how courts and the antitrust enforcement agencies must do more within the existing consumer welfare standard, and that additional legislation will be needed to address important policy concerns outside of antitrust.
The Federal Trade Commission is hosting a series of historic public hearings on the future of antitrust law that begin today. Gene Kimmelman, the President of Public Knowledge, is participating in the hearings. To continue these efforts to examine developments in competition throughout the economy, the FTC should launch two important studies to examine: 1) the impact of big data on platform power, and 2) the impact of consolidation on America’s workers. Americans are concerned about competition, but we don’t have the information we need in order to know whether it is stronger agency enforcement or possibly other policy tools that are needed to address these concerns.