On September 19, the FTC published a staff report following a multi-year investigation of nine social media and video streaming companies. The report found a myriad of privacy violations to consumers stemming largely from the ad-revenue based business models of companies including Facebook, YouTube, and X (formerly Twitter) which prompted unbridled consumer surveillance practices. In addition to these findings, the FTC points out various ways in which user data can be weaponized to lock out competitors and dominate the respective markets of these companies.
The report finds that market dominance can be established and expanded by acquisition and maintenance of user data, creating an unfair advantage and preventing new market entrants from fairly competing. EFF has found that this is not only true for new entrants who wish to compete by similarly siphoning off large amounts of user data, but also for consumer-friendly companies who carve out a niche by refusing to play the game of dominance-through-surveillance. Abusing user data in an anti-competitive manner means users may not even learn of alternatives who have their best interests, rather than the best interests of the company advertising partners, in mind.
The relationship between privacy violations and anti-competitive behavior is elaborated upon in a section of the report which points out that “data abuse can raise entry barriers and fuel market dominance, and market dominance can, in turn, further enable data abuses and practices that harm consumers in an unvirtuous cycle.” In contrast with the recent United States v. Google LLC (2020) ruling, where Judge Amit P. Mehta found that the data collection practices of Google, though injurious to consumers, were outweighed by an improved user experience, the FTC highlighted a dangerous feedback loop in which privacy abuses beget further privacy abuses. We agree with the FTC and find the identification of this ‘unvirtuous cycle’ a helpful focal point for further antitrust action.
In an interesting segment focusing on the existing protections the European Union’s General Data Protection Regulation (GDPR) specifies for consumers’ data privacy rights which the US lacks, the report explicitly mentions not only the right of consumers to delete or correct the data held by companies, but importantly also the right to transfer (or port) one’s data to the third party of their choice. This is a right EFF has championed time and again in pointing out the strength of the early internet came from nascent technologies’ imminent need (and implemented ability) to play nicely with each other in order to make any sense—let alone be remotely usable—to consumers. It is this very concept of interoperability which can now be re-discovered and give users control over their own data by granting them the freedom to frictionlessly pack up their posts, friend connections, and private messages and leave when they are no longer willing to let the entrenched provider abuse them.
We hope and believe that the significance of the FTC staff report comes not only from the abuses they have meticulously documented, but the policy and technological possibilities that can follow from the willingness to embrace alternatives. Alternatives where corporate surveillance cementing dominant players based on selling out their users is not the norm. We look forward to seeing these alternatives emerge and grow.
