No Evidence US Consumers Value Data Highly, FTC Competition Chief Says
There's no evidence suggesting U.S. consumers value personal data “at all,” though news like the Cambridge Analytica privacy breach (see 1804110065) could change perceptions rapidly, acting Director of the FTC Bureau of Competition Bruce Hoffman said Thursday. “There is no good reason to think that consumers value data about themselves in the same way that they value money in their bank accounts,” Hoffman said at a Computer and Communications Industry Association event.
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There's also no theoretical basis for assuming a company acquiring large amounts of data results in consumer harm equivalent to price increases or product quality reduction, Hoffman said. In fact, companies often use consumer data to improve services and products, he said. That’s what Facebook CEO Mark Zuckerberg repeatedly told Congress this week about the benefits of ad targeting. Hoffman noted his opinions could fluctuate, especially with a “large news event going on right now involving data and the safeguards applicable to data.”
Charles River Associates Vice President-Head of European Competition Practice Cristina Caffarra said accumulation of data isn't necessarily the problem: The question is whether the pursuit of data might inspire inappropriate behavior.
Discussing different antitrust approaches in the U.S. and the E.U., Caffarra cited findings from venture capital analyst PitchBook showing the U.S. dominates the startup space. The list for 2017 “unicorns” (startups valued at more than $1 billion) includes 32 American companies, 18 Chinese, four from the U.K. and none from continental Europe. The reason for this is much broader than competition policy enforcement, Caffarra claimed, citing reasons ranging from market makeup to the amount of venture capital in the U.S.
Ex-FTC chairman William Kovacic, now a professor at George Washington University Law School, said there's European perception that U.S. antitrust enforcement has become timid, passive and not a major focus in shaping the debate. One major reason was the FTC’s 2012 decision not to prosecute Google after “a long and fairly loud” run-up to closing the file. At the time, there were three Democrats on the commission and a working Democratic majority in Congress. “Europeans look at that and say, 'If that’s going to happen when the conditions are favorable, when are we going to see a case?'” Kovacic said.
The program under prospective FTC Chairman Joe Simons won't be timid, Kovacic said. Simons, during his time leading the FTC Bureau of Competition, brought more monopolization cases in a 30-month period than any predecessor in FTC history, Kovacic noted. Simons’ program “won’t be passive, and it will be focused in many ways on having a positive agenda that looks at the ways in which the commission can make contributions,” Kovacic said.
Hoffman, meanwhile, cited a June 2015 U.S. government submission to the Organisation for Economic Co-operation and Development (OECD) Competition Committee, outlining a “pro-technology” antitrust philosophy. It argued that disruptive innovation often results in new, better and lower-priced products and services for consumers. Essentially, don’t let the incumbents and existing regulatory structure block innovation and deter the advancement of new technology, Hoffman said: “Does that statement mean that technology companies, the technology industry, gets a free pass because innovation is apparently pro-competitive? Absolutely not.”
On the Facebook matter, International Center for Law and Economics founder Geoffrey Manne argued that there's no evidence big is bad, which Simons told the Senate Commerce Committee in February (see 1802140047). There's no evidence connecting Facebook’s size with its current privacy problem or “that evaluates whether the asserted problem would actually be cured by breaking up Facebook and whether the benefits would outweigh the costs,” Manne said.