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What does the new FTC Task Force for Data Aggregators mean?

Should antitrust regulations regulate how large technology companies collect large amounts of consumer data? This is a question that has received more and more attention recently as regulatory pressure from regulators and legislators on antitrust laws against large tech companies has increased. While the US is still having a long debate on this issue, European regulators have already investigated and in some cases punished major tech companies for their data practices. Part of the debate in the US focuses on whether the control of big data is antitrust, consumer protection, or both. However, there are indications that the FTC, the US Department of Justice antitrust authority and state regulators will not remain idle as the debate continues. Monitoring a technology company indicates that enforcement by the US antitrust authorities may be on its way.

The FTC's new Technology Transfer Taskforce will focus on investigating industry practices and conducting law enforcement investigations. , , on technology-related issues, including prospective merger reviews in the technology sector and reviews of technology mergers. "The Task Force will consist of lawyers who coordinate with the agency's consumer protection bureau and agency technology bosses. This new federal enforcement tool is the FTC's recent bid to monitor the impact of technology markets on competition and is also the most significant of several steps that US and state regulators have taken in this area.

A special concern for regulators Anti-competitive behavior could have a negative impact on consumer privacy. Last September, the DOJ, which included Deputy Minister of Justice Antirust Makan Delrahim, held a meeting with Attorney Generals from eight states and the District of Columbia as well as law enforcement officials from five other states. The DOJ said, and several state-owned joint ventures confirmed that the aim of the meeting would be to discuss whether technology companies could undermine competition and deliberately hinder the free exchange of ideas on their platforms, and ensure that consumers' personal information is protected as far as possible.

Unlike the regulators in Europe, neither the DOJ nor the FTC had specific cases in which these issues were addressed. While US regulators commented on the potential overlaps between consumer privacy and antitrust laws, neither the DOJ nor The FTC had a specific case to refer to anti-competitive issues related to consumer data.

A challenge for US regulators is that it can be difficult to formulate the theory of harm. In general, harm to a group of consumers as a whole would be best remedied by antitrust laws, while harm to individual consumers would be best remedied by consumer protection laws. Some have argued that big data could give a big tech company the opportunity to increase prices and take advantage of consumers, or that the accumulation and control of data has an impact on privacy and data security, thereby compromising the quality of the data Consumers of the product or service offered. However, antitrust law does not make it illegal to charge high prices. Theories of competition should not be based on unfairness, which does not constitute competition damage. When a platform of a technology company serves two markets, e.g. For example, consumers and merchants, and if the transactions on each side are tied together (the so-called "two-sided market"), a competitive antitrust claim would have to be detrimental to both sides of the platform.

Mergers argue that the combination of large datasets could pose potential entry barriers. However, every business can collect consumer data, and this data is by no means unique to form a unified product market. This means that a merger analysis is likely to focus on whether the combination reduces the incentives for merging entities to protect data. So far, the FTC has not complained about a merger based on a reduction in non-price competition for privacy, but noted in June 201

5 that it "explicitly acknowledged that privacy could be a non-price dimension of competition."

At the 21st-century FTC Hearings on Competition and Consumer Protection held in the autumn of 2018, the panelists said it was difficult to prove that a company's collection practices violated antitrust rules It may seem to agree with economists and antitrust practitioners that the acquisition or possession of large data for the regulators alone is not enough to prove a breach. [citation needed] 19659002] Nevertheless, state pushing e regulators and lawmakers the FTC to pursue this cases. In a letter to the FTC in October 2018, attorneys general from eleven states and the District of Columbia called on the FTC to aggressively enforce antitrust law at the "interface between data protection, big data, and competition." Public authorities argued that this was possible "possible anti-competitive long-term damage resulting from the aggregation of big data by a small number of dominant platforms", including the possibility that data aggregation could become an entry barrier. The state-owned companies argued that dominant companies could hinder competition in "new business areas and possibly in particular in connection with new services" and demanded "[c]" radical and vigorous enforcement efforts. " In particular, state-owned companies criticized the "misunderstood application of consumer protection standards", pointing out that they felt it could be "too tight" under certain circumstances.

In particular, federal and state regulators do not list which specific laws or regulations they should enforce or how accumulation should be committed by big companies through tech companies may violate these statutes and regulations. In contrast to EU competition law, US antitrust laws do not impose dominant market power unless there are anticompetitive practices that allow the target to maintain or expand its monopoly. While the acquisition and collection of consumer data in the United States may be valuable and of considerable importance to competition, there are no exclusion concerns. The growth of technology companies focused on collecting information about Internet users and consumers does not necessarily mean that antitrust laws have been violated. If a company gains market power through legal means, there is no violation of US antitrust laws. To this end, the literature on competition concerns against big data in no way includes a way to handle an enforcement action in the US.

Despite the continuing debate, the control of technology companies – especially the big technology – will continue to grow. The European Commission and other European competition authorities have laid the groundwork for future antitrust proceedings and have tried to test antitrust theories by bringing enforcement claims against technology companies in Europe. The establishment of the FTC Tech Task Force signals that US regulators want a similar approach, especially when it comes to data aggregation. This also means that the FTC has now deployed personnel and resources to investigate potential misconduct and to test cartel theories. As a technology firm accumulates and manages large amounts of consumer data, but has not yet evaluated how regulators can leverage their business model and data-related practices, it's time. As the debate continues and there is considerable doubt as to whether federal and state regulators would be able to present data practices as an antitrust matter, the risk of being involved in a lengthy and costly investigation requires careful consideration. Zarema A. Jaramillo and Kathleen McGee are lawyers at Lowenstein Sandler. Zarema is a partner of the Antitrust and Global Trade Group. Kathleen is a lawyer in the Tech Group and was recently head of the New York Public Prosecutor's Office for Internet and Technology.

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