The U.S. Justice Department’s top antitrust enforcer said data collection practices of technology companies can raise competition concerns, the latest warning directed at the industry amid a broad investigation of its biggest companies.
Makan Delrahim, the head of the antitrust division, said Friday in a speech at Harvard Law School that the department is paying close attention to the ways data can enhance market power. Amassing huge amounts of data can further entrench dominant companies at the expense of emerging competitors, he said.
“Antitrust enforcers cannot turn a blind eye to the serious competition questions that digital markets have raised,” Delrahim said. “That is especially true as we confront mounting evidence about sustained high market shares and potential anticompetitive behavior in digital spaces.”
While Delrahim didn’t name any companies specifically, his remarks come as the antitrust division is conducting an inquiry into the practices of large tech platforms, including Alphabet Inc.’s Google. Delrahim’s focus on data indicates that the department is wading into an emerging area of antitrust law that could feature in a future enforcement case.
Delrahim said aggregating large sets of data isn’t by itself illegal but practices like shutting off a rival’s access to data could be an instance of anti-competitive conduct.
The division “is especially vigilant about the potential for anticompetitive effects when a company cuts off a profitable relationship supplying business partners with key data, code, or other technological inputs in ways that are contrary to the company’s economic interests.”
That’s an accusation that has been leveled at Facebook Inc. by others.
For example, in roughly 7,000 pages of documents leaked from a lawsuit against Facebook, employees including top executives argued about policies that would cut off competitors’ ability to advertise on the platform and access Facebook’s audience and user information. Facebook says the documents have been cherry-picked.
With services like Google search or Facebook’s social media platform offered for free to consumers, antitrust enforcers “need to play an even greater role” in assessing how the aggregation of data affects competition, Delrahim added.
Consumers’ privacy preferences, such as having their personal data protected, plays a role in antitrust analysis that shouldn’t be overlooked, he said. Competitive markets don’t just turn on pricing, he said. The quality of products -- such as privacy protections -- play a significant role as well, he added.
“These non-price dimensions of competition deserve our attention and renewed focused in the digital marketplace,” Delrahim said.
--With assistance from Ben Brody.