With the U.S. Department of Justice considering a breakup of Google while the presidential election approaches, many people will be watching closely to see where candidates stand on Big Tech monopolies.
Given that presidents have little real control over the economy or GDP, some of this attention may be misplaced. What presidents can influence, however, is the choice of the trade commissioner, the person who enforces competition policy. A trade commissioner who has a legalistic approach to data and places restrictions on it could bring about major changes.
Here are some key issues to consider when evaluating the candidates’ approach to Big Tech and monopolies during election season.
1. Breaking up Big Tech giants: One approach to competition is to view large firms as anti-competitive and work to break them up. This is similar to the approach taken with phone companies decades earlier. There are some serious drawbacks to this approach. One drawback is that unlike phone lines, data can be easily copied. We could end up with multiple mini-firms, each of which has access to all our data. Second, given that firms use data to run their businesses better, if these companies each have access to less data, they will operate less efficiently and deliver users a worse experience. While neither candidate has made this regulatory approach the primary focus of their campaign, a Harris administration would likely focus on continuing the Biden administration’s enforcement actions against companies that have monopolized the industry. A second Trump administration may also see some antitrust actions, considering suits filed against Google and Meta under Trump’s Justice Department in 2020.
2. Data portability: As tech plays a bigger and bigger role in our lives, many consumers are, in essence, locked into tech platforms that make it hard to migrate elsewhere. What could change that would be data portability laws that made it easier for consumers to move their information to another location. Such laws would have a similar effect to the universal wall sockets we can use for virtually any piece of electrical equipment.
Without data portability, a consumer who wants to use a new platform may have a worse consumer experience with poorer recommendations, less favorable financial terms from a lender or be faced with spending time inputting relevant data. Such costs keep consumers locked into existing business relationships. With data portability, smaller firms that might want to enter the market could now access the data they need to operate. With more entrants competing for each customer, customers would be likely to get a better deal.
3. Data privacy restrictions: Many consumers are worried that Big Tech firms are stealing or selling their data. In response, many politicians around the world have proposed limits to what firms can do with customers’ data.
However, such limits might undermine customers’ ability to benefit from sharing their data. When customers transact with a business, that business values the data from that transaction and benefits from doing more of these transactions. While every business would like to sell more, firms that value customer data have an extra incentive to sell more. They can achieve this by lowering their price. At a slightly lower price, they will sell more and accumulate more of the valuable data. Lowering the price is a way for a business to maximize their profit, when collecting data is profitable.
The difference between the price without data and the price with data is an implicit payment for data. Customers may not be aware they are being compensated for data. Firms may not recognize the subsidy in this way. But a firm that experiments with prices and profits and values their data will end up subsidizing transactions. This benefits customers. If firms face limits on how that data can be used or sold, that consumer subsidy would likely disappear and prices would rise.
4. Posting prices for being “forgotten.” A big question is whether the compensation we get for our data is fair or adequate. Currently, no one knows how to value it. It’s like a foreign currency we don’t know how to work with—similar to when we’re traveling and see a price for a sandwich at 23,000 foreign dollars and then realize it’s the equivalent of $5.00. Because data is being bundled with other transactions, we never see posted prices for the data, so we’re not in a position to demand a better deal. Unbundling the data transaction could help.
To unbundle a data transfer from a goods or services transaction, firms need to allow customers the freedom to be anonymous, for a price. Companies could hypothetically charge you a lower price if they got to keep your data and a higher price if you wanted them to forget you. Consumers would have a choice as to whether they transacted with the data in exchange for money, or paid money to avoid doing so.
Big Tech is getting a toehold in more of our daily lives with each passing day—and as it does, it’s facing greater public scrutiny. That scrutiny alone won’t protect the public interest in the upcoming election. What will make a difference is staying focused on the antitrust issues likely to have the greatest effect on our well-being.
