Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Competition enforcement in the digital economy considered by FTC commissioner, (Jun 24, 2016)

By Jeffrey May, J.D.

FTC Commissioner Terrell McSweeny discussed competition law enforcement in the digital economy in a keynote address to the annual Chatham House Competition Policy conference yesterday in London. McSweeny considered: (1) the role of competition enforcers in the digital economy, (2) the role of "big data" in antitrust enforcement, and (3) the frontiers for competition enforcers in the digital economy, in her prepared remarks—entitled "Disruptors, Data & Robots: Competition Enforcement in the Digital Economy Competition Enforcement in the Digital Economy." The commissioner touched on many of the same themes noted in her April address to the 16th Annual Loyola Antitrust Colloquium in Chicago.

Competition enforcers can and should play a vital role in protecting competition in the high-tech, digital economy by keeping markets open for innovators and by advocating on behalf of disruptive entrants, McSweeny suggested. "[A] potential entrant must be confident that competition enforcers will respond to anticompetitive exclusionary vertical conduct or other monopolistic behavior by a dominant incumbent," McSweeny said. In the merger area, innovation effects should be part of the analysis, it was noted.

Big data. On the topic of big data, McSweeny explained that data can constitute a relevant market and can be a barrier to entry. There is no "special case" for data. It does not always convey market power or operate as a barrier to entry, nor is it categorically exempted from antitrust scrutiny. She also advised that "absent a clear nexus to competition, however, privacy and data protection concerns are best handled as consumer protection issues."

The commissioner pointed out that data was treated as a relevant market in the 2010 challenge to Dun & Bradstreet’s consummated acquisition of Quality Educational Data, its nearest rival in the education marketing business. Dun & Bradstreet entered into an FTC consent order, requiring divestitures aimed at addressing the potential competitive harm allegedly caused by the combination of only two significant competitors in the K-12 education data market.

New frontiers in competition policy in the digital age. Lastly, McSweeny identified some of the challenges for competition enforcers presented by the digital economy and the rise of high-velocity computerized markets. Noting that the FTC had taken steps to expand our in-house expertise by adding the Office of Technology, Research and Investigations which includes technologists and computer scientists, the commissioner predicted that there would be a need to significantly expand the role technologists play in future, high-tech cases. In addition, sophisticated algorithms present risks of consciously parallel behavior. They can also result in narrower product market definitions where they enable sellers to more effectively target certain consumers, according to the commissioner.

"We must be mindful of these challenges, yet we must also continue to be aggressive in our role in advancing our mission to protect consumers and to promote competition," McSweeny concluded.

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