Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Consumer and privacy groups call on FTC to investigate large data mergers, (Feb 6, 2015)

By Dan Selcke, J.D.

Officials from the Center for Digital Democracy (CDD), the U.S. PIRG, Consumer Watchdog, and Public Citizen sent a letter to Federal Trade Commission Chairwoman Edith Ramirez calling on her organization to do more to investigate mergers that implicate digital privacy concerns, according to a press release from the CDD.

The letter was inspired by the recent approval by the Department of Justice of the acquisition of Datalogix, a major data broker, by the Oracle Corporation, a multinational computer technology company. That deal marked the second major acquisition for Oracle since it purchased data broker BlueKai last year, another deal the letter cautions was done through an early termination process. The letter expresses concern that mergers like this represent a potential threat to consumer privacy, and urges the FTC, along with the Bureau of Consumer Protection, to take a more active role in overseeing them.

The letter presents a number of arguments as to why the merger should have triggered a review by the FTC. Combined, Oracle and Datalogix’s data sets include financial, racial, location, and other sensitive data. Because of their partnerships with Facebook and Google, the letter argues, the FTC should have reviewed the merger as mandated by the respective Consent Decrees. Finally, the letter pointed out that both Oracle and Datalogix participated in the Department of Commerce’s “Safe Harbor” program for the European Union, and that the FTC needed to examine how the merger might affect the privacy of EU online users.

“The Oracle/Datalogix deal reflects the digital data ‘arms race’ underway where companies are amassing powerful and detailed sets of information to track and target a consumer anywhere, anytime,” explained Jeff Chester, CDD’s executive director. “Control over an individual’s information, and the capabilities to use it effectively in today’s Big Data era, are falling into fewer hands. Unfortunately, these critical mergers suffer from ‘premature approval syndrome,’ sanctioned by regulators without adequate analysis and discussion.”

In addition to calling for stricter review of large data mergers and an investigation into the impact the resultant pooling of data may have on the ability of companies to target consumers with heretofore unseen precision, the letter also urges the FTC to launch a public workshop on how best to explore the new data-driven marketing landscape and its implications for 21st century competition and consumer protection. The investigation and workshop should address the review process the FTC and DOJ currently have in place for data mergers, and identify ways that privacy and consumer protection issues can be addressed.

“The American public deserves to know how the consolidation and use of their information affects their daily lives,” the letter concludes. “We urge the FTC to develop a more effective approach to identifying new problems and threats to competition and consumer protection in the Big Data era.”

Companies: Center for Digital Democracy; U.S. PIRG; Consumer Watchdog; Public Citizen

News: ConsumerProtection