Tech mergers may need examination outside normal competition law - LSE professor


Tech mergers may need examination outside normal competition law - LSE professor
  1. Tech mergers may need examination outside normal competition law - LSE professor
    irishtimes.com
    Clearing of Facebook’s WhatsApp deal ignored ‘critical’ data issue, says Orla Lynsk…
    Business

Mergers by data-rich tech firms may need to be examined in a fresh way, outside of normal competition and privacy law structures, because of the vast amounts power personal data gives them, a law professor at the London School of Economics has said.

In a talk entitled Recasting Private Power: Tech Giants as Digital Utilities, Prof Orla Lynskey spoke about the strategic position of content and service providers such as Facebook and Google, noting they had a monopoly, or quasi-monopoly, over information flows.

Prof Lynskey suggested EU anti-trust regulators had also not examined crucial aspects of Facebook’s acquisition of WhatsApp in 2014, because they had not looked at the personal data aspect of the businesses.

She told the event at the at the ADAPT Centre for Digital Content Technology at Trinity College Dublin that the huge volumes of personal data processed by such companies could allow them to profile individuals, giving them a “God’s eye view” using personal data.

There also seemed to be a growing policy concern about the “data power” of such tech companies.

Exploring the question of whether this power warranted some of specific regulatory intervention above and beyond existing regulatory regimes, Prof Lynskey suggested that treating data-driven agreements and mergers in a different way, might prevent the “artificial accumulation” of large databases.

One example of where this could have happened was the Facebook and WhatsApp merger which was cleared by both the Federal Trade Commission in the US and the European Commission, she said.

The merger had been cleared on a similar basis to those involving Google’s acquisition of various home devices, which was that Facebook and WhatsApp were not direct competitors in any particular market.

Prof Lynskey said this ignored “some very critical points”.

“They failed to examine why up to 50 per cent of WhatsApp users did in fact have a Facebook account and yet preferred to use WhatsApp over Facebook Messenger,” she said.

“You could at least surmise that part of the reason why some people preferred WhatsApp over Facebook Messenger was privacy related.”

“That factor was not considered.”

“Was WhatsApp here a maverick that offered individuals a privacy-protecting alternative to Facebook? They didn’t consider why Facebook wanted this transaction to go through in the first place.”

In May, the European Commission’s anti-trust regulators fined Facebook €110 million for negligently or recklessly misleading it in relation to the merger.

“The EU commissione…

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