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Inside Privacy Updates on Developments in Global Privacy & Data Security from Covington & Burling LLP

Privacy increasingly a factor in antitrust/competition law analysis

Posted in Advertising & Marketing, Federal Trade Commission, Social Media, Technology Transactions

I attended the ABA’s Antitrust Law Spring Meeting the last two days.  What struck me the most was the increased prominence of data and privacy as factors in analysis of markets and competition in antitrust law.  This was the topic in the Chairman’s Showcase session on Thursday.  Julie Brill, the FTC Commissioner, perhaps made the point the best.  She explained that if privacy is becoming a competitive differentiator (e.g., consumers are persuaded to use one service over another because the chosen service has better privacy practices), then privacy is clearly a non-price factor in competition law analysis.  Commissioner Brill provided an overview of the FTC’s report on consumer privacy and emphasized three parts of the report: privacy by design, transparency and choice.  She also emphasized that the FTC was focused on the fact that technical approaches to privacy solutions could impact competition in the market.  However, her view was that standards bodies would mitigate against this concern.  Ken Anderson, Assistant Commissioner for Privacy in Ontario provided an explanation of privacy by design.  Much of the information from his presentation is readily available in a useful video presentation at  www.privacybydesign.ca

HP demonstrated an automated tool that it is testing as part of its privacy by design implementation which looked impressive. The HP “Accountablity Model Tool” sends records and reports to the HP privacy office as products are developed.  Google introduced the audience to the “data liberation front” which enables users to extract their data from Google products – see www.dataliberation.org.

Some of the panelists pointed to the fact that collection and ownership of data can be indicators of market power.  However, there was also recognition that authorities need more experience and information to better assess the impact of data and privacy.  There was also discussion of data becoming a market in itself as various companies start to develop businesses around consumer data.  A graphical representation of the display ad ecosystem (created by Luma Partners LLC) was displayed to illustrate the point.  A copy of the graphic can be found here http://aggregateknowledge.com/what_ecosystem.html

I spoke on a second panel discussing privacy issues associated with US distribution chains.  Chris Olsen, Assistant Director in the Division of Privacy and Identity Protection at the Federal Trade Commission, led the privacy discussion on our panel.  Chris emphasized the same three themes as Commissioner Brill - privacy by design, transparency and choice and discussed some recent enforcement actions.  In my comments I pointed out that distribution chains validate the FTC report’s suggestion that baseline privacy regulation should apply to all entities that have access to consumer data, because this will help ensure that intermediaries in distribution chains also respect consumer privacy.  Intermediaries may have access to vast amounts of data but they are often invisible to consumers.  Such intermediaries are not constrained by the fear of consumer backlash, as consumers are unaware of their role – so hence the need for regulation to cover such data intermediaries.  The luma graphic illustrates just how many intermediaries now exist in the digital economy.  I also commented that contracts remain an important tool in achieving good privacy practices because they provide the basis for day to day enforcement of good privacy practices between business partners.

It was my first time to the ABA Antitrust Spring meeting and I was certainly impressed with the quality of the event.