Data Protection and Antitrust: New Types of Abuse Cases? An Economist’s View in Light of the German Facebook Decision

By Justus Haucap – 

Many services on the Internet are seemingly offered for free. People do not have to pay for them, at least not with money. The present article argues that it is rather difficult to conceive what use of data would constitute an exploitative abuse of market power in these markets – the issue which has been at heart of the German investigation into Facebook’s data combination practices. In particular, the question emerges as to what the appropriate benchmark for exploitative data abuse cases should be. Requiring dominant firms to behave more like competitive firms would be rather absurd if small firms without market power violate privacy standards more often than larger firms. Moreover, if users are not aware of what kind of data is collected and how this data is used due to a lack of transparency, as has been suggested in the German Facebook case, this appears to be, by and large, a problem of asymmetric information which is not necessarily related to market power. Overall, portraying excessive data usage as being analogous to excessive pricing is fraught with several difficulties. In contrast, it is easier to conceive that not granting third-party access to data may be an obstructive abuse of market power. Moreover, as data is – in contrast to many other facilities – non-rival in use and – at least in some cases – not associated with significant investment expenditure, the legal threshold for third-party access should generally be lower than for classical essential facilities such as physical network infrastructures.

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