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Can Antitrust Enforcement Improve Privacy Protection? Privacy as a Parameter of Competition in Merger Reviews

 |  July 30, 2019

By Mark MacCarthy (Georgetown University)

In principle, antitrust merger reviews can take steps to preserve privacy competition by blocking or conditioning proposed transactions that substantially lessen this form of competition. This essay focuses on the realistic prospects for making progress on privacy protection in this way. After some general remarks on the topic, it illustrates the way merger reviews can assess privacy competition through an examination of two recent merger reviews involving digital platforms, the European Commission’s decisions in their reviews of the Facebook/WhatsApp merger and the Microsoft/LinkedIn merger.

The implications of this assessment should not give us cause for optimism. Any exercise of competition law’s merger review mechanisms to address privacy concerns necessarily confronts a range of legal, factual and practical considerations that collectively amount to large and potentially insurmountable obstacles. These include the inability to apply or extend privacy law directly, the unresolved conceptual knots in clarifying the notion of privacy competition, the empirical difficulties in determining the existence and extent of privacy competition, and the requirement to show that any post-merger failure to satisfy privacy preferences results from a substantial lessening of competition, rather than from independent business judgments or the proper operation of competitive forces. Finally, merger reviews face a fundamental legal limitation in the form of an inability to introduce new competition into the marketplace. This makes it highly unlikely, though not impossible, for merger reviews to increase privacy protections beyond what would already be provided for in the marketplace.

The thrust of the essay is not that it is bad competition law to consider privacy competition in merger reviews. Rather the point is such efforts are not likely to improve privacy very much. In the end, if we want more privacy than current privacy law requires, and more than companies would normally provide on their own, we will need to establish it through other resources available to competition law or directly through new national privacy legislation.

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