Facebook’s preeminent status as an unchecked harvester of user data isn’t likely to change unless U.S. officials commit to stricter regulation and enforcement U.S. antitrust laws.
University of Tennessee College of Law Professor Maurice Stucke shared that message last month in an article published by the Harvard Business Review.
Stucke’s article came on the heels of a visit to the United Nations earlier in the month when he and other leading scholars from around the world were called to address the implications of a data-driven economy. At the heart of his concerns are companies like Facebook, Google, Apple, and Amazon – or data-opolies – as Stucke calls them, whose collection of data can pose a number of risks to individuals and the economy. His research builds on his books “Virtual Competition” and “Big Data and Competition Policy” that he co-authored respectively with Ariel Ezrachi and Allen Grunes.
“They want to ensure that a data-driven economy is inclusive and equitable, and they’re looking at it from many different perspectives,” Stucke said of the United Nations committee. “They are interested in the competition issues that arise in a data-driven economy.”
In both his presentation at the United Nations and his Harvard Business Review article, Stucke warned of eight potential threats posed by data-opolies, including:
- Lower-quality products with less privacy – as the collection of too much personal data can be the equivalent of charging an excessive price;
- Surveillance and security risks – in markets where personal data is concentrated in a few firms;
- Wealth transfer to data-opolies – who extract personal data without having to pay for the data’s fair market value;
- Loss of trust – as consumers forgo the data-opolies’ services that they would have otherwise used if their privacy were protected;
- Significant costs on third parties – as data-opolies control key platforms, such as a mobile phone operating system, and cheaply exclude rivals;
- Less innovation in markets dominated by data-opolies – who use their data-advantage (“now-casting radar”) to see what products are becoming more popular and squelch nascent competitive threats;
- Social and moral concerns – when data-opolies hinder individual autonomy by limiting opportunities for startups that subsist on their platform and foster addiction to their services; and
- Political concerns – as economic power often translates into political power.
“The potential harms from these data-opolies can affect not only our wallets, but also our privacy, autonomy, well-being, and democracy,” Stucke said. “Anti-trust enforcement is necessary, but not sufficient, to promote privacy competition. Competition officials have to coordinate with the privacy and consumer protection officials globally.”
Stucke has also authored a longer piece for Georgetown Law Technology Review titled “Should We Be Concerned About Data-opolies?”
Stucke, a professor at the University of Tennessee College of Law since 2007, is a former trial attorney with the U.S. Department of Justice, Antitrust Division. He successfully challenged anti-competitive mergers and restraints in numerous industries, focusing on policy issues involving antitrust and the media.