Big Data, Digital Marketing, and Privacy: Antitrust & Competition Issues for the 21st Century
By: Jeff Chester | Jul 7 2015
The digital data “arms race” that is propelling major companies around the world to expand their data collection, consumer profiling, and online targeting capabilities illustrates how information from and about us drives the commercial (and increasingly political) marketplaces. Corporations want to know as much about us as possible—including how to influence us at any point in what they call the “consumer journey.” Companies are significantly investing in sophisticated “data management platforms” that regularly gather and analyze our behaviors. Large amounts of so-called first-, second-, and third-party data (information collated from their own files on us and amplified by additional files from numerous data brokers) are used to influence our online and offline experiences.
Antitrust and merger regulators have not kept up with how consumer data is being used today. It’s become a dynamic and critical factor, whose “actionabilty” (the capacity to use our information both instantly and effectively) to influence the decision-making of both individuals and groups is crucial for competiveness. Companies are increasingly expanding their ability to effectively track individuals and use that information (where are we online, what did we do, whom we communicate with, and what we read, buy, etc.). These practices illustrate how commercial surveillance has become a fundamental part of our lives today. But violating our privacy is just one key and disturbing dimension of this largely invisible data apparatus. Another is that data is used in new ways as part of a much more complex system that delivers influence and promotes behavioral changes.
How data is used today to transform the consumer experience should be a focus of competition regulators. Merger reviews need to go beyond issues related to what price we may pay for a product to explore how data is and will be used to change our perceptions, relationships, and actions with items and brands. While advertisers and marketers have always been in the persuasion business, they’ve never before had the capabilities they have today—from neuromarketing to social media marketing to advanced data analytics used for targeting and much more. And nearly every day these companies advance the data-driven digital influence process. The very nature of contemporary media companies is all about using our information to drive consumer transactions, regardless of device and location. (See Google, Facebook, etc.).
We still don’t know what the cumulative effect of all this will be, but our consumer-protection and competition regulators need to be on the cutting edge—not looking backward. Both the Department of Justice and the Federal Trade Commission need to stay abreast of how Big Data and the techniques tethered to it change the nature of markets. The approval of Big Data mergers by the DoJ and the FTC without a thorough analysis and public accounting, illustrates that it’s time to reform the process. This is on the agenda of consumer advocates, including those working together across the Atlantic.