Big Tech Investigation Focused On Abuse Of Data, DOJ Antitrust Chief Says
The Department of Justice’s investigation into online platforms is focused on the possibility that tech firms could use data they’ve gathered from customers to block competitors from markets they manage, according to the agency’s top antitrust official.
“If we found that they had market power in a specific, you know, in a defined market, and they have data that they could use to prevent a competitor from challenging that market? Then that could be a violation, yes, absolutely,” Assistant Attorney General Makan Delrahim told the Washington Examiner, referring to big tech corporations such as Facebook and Google.
The “defined markets” in question, Delrahim said, could be the search industry or social media. “Our investigation is focused on” the potential abuse of data by online platforms, he said.
Delrahim also noted that the DOJ was “trying to identify what other [harmful] conduct could go on in any of these, by any of these companies.”
The investigation on the use of data could put increased scrutiny on big tech companies that are already under significant pressure from Congress, regulatory agencies, and the public at large.
“This definitely seems like a trend emerging, of a focus by [Delrahim] and others on zero-price markets and the value of data,” said John Newman, a DOJ antitrust lawyer during the Obama administration and an associate professor of law at the University of Miami. “I think it’s a good sign, and I hope to see future development.”
A zero-price market is one in which companies set the price of their goods or services at $0, as Google and Facebook do for most of their core services. “Recognizing a market where there is not a price is pretty revolutionary — the basic notion that you can have a market and consumers within a market even though there are no prices seems incredibly obvious, but this hasn’t been the DOJ’s belief until now with Delrahim,” Newman said.
Some within the antitrust world, however, are skeptical of Delrahim’s rhetoric and say that they need to see specific actions before they believe him.
“He uses massively coded language in terms of what he actually means regarding enforcement. The only thing you know is what he does,” said Matt Stoller, an antitrust expert and author of Goliath: The Hundred Year War Between Monopoly Power and Democracy. “Until the DOJ actually does something, what he says is a joke.”
Stoller cited Delrahim’s and the DOJ’s stance in recent antitrust cases such as the lawsuit against Qualcomm, the controversial merger between T-Mobile and Sprint, and a recent rollback of antitrust regulations in Hollywood as examples of the DOJ taking the side of big corporations and monopolists under Delrahim’s watch.
Delrahim, 50, previously served as a deputy assistant attorney general of the DOJ’s Antitrust Division from 2003 to 2005 and was a counsel to the Senate Judiciary Committee in the late 1990s. He was a partner at the law firm Brownstein Hyatt Farber Schreck for more than a decade before returning to the DOJ to head the antitrust division in 2017. While in private practice, he was an attorney for several major technology companies, including Google, Apple, and Qualcomm. He has also been a media and television entrepreneur in between his government stints.
Multiple antitrust lawyers and experts told the Washington Examiner that, although there has been significant public scrutiny regarding the size of big tech companies and the vast amounts of consumer data they obtain, examining the specifics of their behavior and alleged harm would be key.
“It’s not enough to say these [big tech companies] are really big and have a whole lot of data — that’s not a practice that can be problematic on its own,” said Tad Lipsky, a law school professor at George Mason University who served as the acting director of the Federal Trade Commission’s Bureau of Competition in the beginning of the Trump administration.
Lipsky emphasized that to succeed in court, regulatory agencies such as the DOJ need to demonstrate a specific behavior of big tech companies that is having a negative effect and also explain how regulatory action would improve the situation. He added that, oftentimes, the supposed solution to an antitrust problem “just makes things worse.”
A specific example of potentially problematic behavior by a big tech company that could catch Delrahim’s eye could be that “Facebook refused to give [relevant data] to application providers that Facebook thought to be rivals,” said Hal Singer, an antitrust expert and Georgetown University adjunct professor.
A recent leak of thousands of confidential messages, documents, and emails from inside Facebook showed how the company made special exceptions to restrict data access to companies such as Youtube, Amazon, Twitter, and Pinterest, which it viewed as competitors.
To successfully challenge the way big tech companies handle their data currently, Singer said that the DOJ and others would ideally need to “identify a restraint by a tech company, show how their data is restricting access within a market, and also causally link this to some consumer harm.”
The other alternative to the DOJ taking action against big tech is Congress passing legislation to force companies to change how they use their data. One such data bill, the ACCESS Act, has been introduced in the Senate with bipartisan support. The bill would require companies with products or services with more than 100 million monthly active users in the U.S., including Facebook and Google, to create a tool that makes it easy to transfer personal data between services. This could allow newer, smaller players to enter the market and give them a chance to attract users and compete with established tech titans.