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FTC’s Chopra Says Tech Isn’t Free When Users Pay With Data

Oct. 18, 2019, 8:35 PM

Tech giants are effectively charging users to access their platforms by offering limited privacy protections and asking consumers to turn over their data for targeted advertising, a Democratic member of the Federal Trade Commission told a House antitrust subcommittee.

The companies can use their market power to change terms of service to enhance data collection efforts, Democratic Commissioner Rohit Chopra (D) said during an Oct. 18 hearing. Chopra called such privacy policy changes, which are often hidden in fine print, a “price hike.”

“We are paying with our data,” Chopra said.

Regulators and lawmakers alike increasingly are focused on the intersection of data privacy and competition issues. Privacy is “obviously a key part of competition,” Rep. David Ciccilline (D-R.I.), the subcommittee chairman, told reporters after the hearing.

Tech giants, including Facebook Inc., Alphabet Inc.'s Google, Amazon.com Inc., and Apple Inc., are facing antitrust and privacy scrutiny from regulators in the U.S. and other countries. Multiple state attorneys general, the FTC, and the Department of Justice are all looking into whether big tech companies are using their market power to shut out competitors. State attorneys general and consumer litigants are also going after tech giants for alleged privacy missteps.

Companies such as Facebook and Google offer free services to consumers in exchange for access to their data, which the companies can use to build new products.

Tech giants often change their privacy policies and data use activities, which can lead to a high cost for consumers turning over their data or more limited options for protecting privacy, Chopra said.

Tech giants are also using their market power to limit choices for consumers who voluntarily turn over their data in exchange for platform access, Tomasso Valletti, a former European Commission chief competition economist, told Bloomberg Law in an interview.

Sometimes consumers have choices, “but sometimes we can’t choose,” Valletti said.

To contact the reporter on this story: Daniel R. Stoller in Washington at dstoller@bloomberglaw.com

To contact the editor responsible for this story: Keith Perine at kperine@bloomberglaw.com