U.S. antitrust regulators plan to ramp up their scrutiny of tech companies’ data practices, acknowledging rising concerns that consumer information can increase market power.
The Federal Trade Commission’s new task force that will monitor tech industry competition, announced Feb. 26, plans to incorporate data collection and privacy as main variables in its oversight of companies, Bruce Hoffman, the head of the agency’s competition bureau, said in a call with reporters.
Hoffman’s bureau oversees merger reviews and competition concerns. But as part of the task force’s new mandate, the bureau will work closely with the FTC’s consumer protection bureau, which regulates privacy and data security. “Those issues are absolutely critical here and will be considered,” he said during a press call on Feb. 26.
The task force formation is the FTC’s strongest affirmation yet that it intends to keep up with European antitrust regulators who have heightened their scrutiny of tech sector issues, including the massive collection of consumer data to boost competitive advantage.
U.S. antitrust regulators have consistently said privacy alone can’t be a reason for actions like blocking a merger deal, although the consolidation of “big data” can theoretically be a competition problem. But privacy and market competition, once seen as distinctly separate areas of enforcement, are intersecting more frequently in technology. And the new task force’s oversight will often target companies whose potentially abusive tactics may lie at the intersection.
“I certainly think it’s an indicator of further attention in an important area, where a lot of questions are being raised internationally,” Maureen Ohlhausen, an antitrust partner at Baker Botts LLP and former FTC acting chairman, said. “It will be interesting to see whether it results in enforcement.”
The new task force also will coordinate and consult with staff throughout the agency on other technology-related matters, including reviews of prospective and consummated mergers. It could crack down on companies with enforcement actions when warranted, it said.
The initiative comes amid criticism that U.S. regulators are lagging behind their European counterparts in responding to competition and privacy concerns around big tech companies like Facebook Inc.
U.S. regulators have been asleep on these issue, Jamie Court, president of public interest group Consumer Watchdog, said. “The EU has been so much more aggressive.”
Germany’s competition authority Feb. 7 issued a groundbreaking order requiring Facebook to end its practice of merging data from different company-owned services and outside sources without prior user consent. It was one of the first major antitrust enforcement actions involving big data and privacy.
The social media giant is appealing the decision.
Several tech industry acquisitions — including Google buying DoubleClick and Facebook’s acquisition of WhatsApp — have prompted objections from public interest groups on data privacy grounds.
—With assistance from Daniel R. Stoller