While Delrahim did not mention any specific company by name, the comments could have vast implications at a moment when the agency is investigating tech giants including Google.
“Although privacy fits primarily within the realm of consumer protection law, it would be a grave mistake to believe that privacy concerns can never play a role in antitrust analysis,” Delrahim said.
Later, he added, “Without competition, a dominant firm can more easily reduce quality — such as by decreasing privacy protections — without losing a significant number of users.”
Delrahim’s speech could bear special significance for tech giants including Amazon, Facebook and Google, which are confronting competition-focused investigations in Washington for their business practices. Such warnings are a familiar refrain in Europe, where antitrust regulators have probed and penalized tech giants for wielding their massive stores of data in anti-competitive ways. (Amazon CEO Jeff Bezos owns The Washington Post.)
With Amazon, a key concern is the e-commerce giant’s collection of sales data from third-party merchants and whether the tech giant is able to leverage that unique position against smaller rivals. In Facebook’s case, the fear is that no competitor could ever launch a viable social network of their own because they could never match Facebook’s stores of data — a serious threat to users, experts say, given the company’s pockmarked record on privacy.
And for Google, advocates for aggressive antitrust action against the tech industry take issue with its unparalleled view into its users’ lives from the wide array of services it provides — from its search engine to its Android smartphone operating system. Federal regulators are likely to confront this issue directly in the coming months, following Google’s announcement that it would acquire FitBit, a wearables company, for $2.1 billion. The purchase, if approved, could grant the tech giant access to even more information — this time, about device-owners’ health and wellness.
Without commenting on those or other companies, Delrahim said collecting data is not by itself anti-competitive — rather, it is about what is done with that data. He delivered that message in front of an antitrust conference at Harvard Law School hosted by the Computer & Communications Industry Association, which counts Amazon, Facebook and Google as members.
“Amassing a large quantity of data is not necessarily anticompetitive,” he said. “The more complicated question for enforcers is how data is collected, analyzed and used, and, most importantly, whether these practices harm competition.”
Delrahim said the Justice Department is “especially vigilant” when a company “cuts off a profitable relationship supplying business partners with key data, code, or other technological inputs in ways that are contrary to the company’s economic interests.”
And the Justice Department antitrust chief also stressed the agency is mindful about the effects on users as well: “Just as antitrust enforcers care about companies charging higher prices or degrading quality as a sign of allocative inefficiency, it may be important to examine circumstances where companies acquire or extract more data from consumers in exchange for less.”