The digital economy is the priority of the main regulators and policymakers around the globe. In a data-driven economy where data and the underlying privacy are two important competition factors, Dr. Maria Wasastjerna offers in her book Competition, Data and Privacy in the Digital Economy: Towards a Privacy Dimension in Competition Policy? a timely legal analysis on how to update competition rules to this economy.
From a legal perspective, the book explores the intersection between competition law and data protection law in Europe and the United States. In a well-structured demonstration, Dr. Wasastjerna analyses both legal regimes on both sides of the Atlantic and their underlying goals, and then whether and how these rules interlink in data-driven markets. In those markets where the main business model consists of offering a zero-price personalised service to users in exchange for their data and attention to advertisements, and a paid service to advertisers in exchange for targeted advertising based on user data, Dr. Wasastjerna argues that regulators should consider data and privacy in their competitive assessments of data-driven antitrust and merger cases. While many competition cases deal with privacy and competition, such as the German Facebook case, the French Apple App Tracking Transparency (ATT) case, the UK Google Privacy Sandbox, and the Google/Fitbit merger, scholars and regulators are still trying to understand how to analyse privacy as a non-price competition parameter.
Dr. Wasastjerna contributes to this discussion by developing legal argumentation from the history of competition law to the importance of privacy to users despite behavioural bias such as the privacy paradox and the ‘free effect’. While comparing both US and EU antitrust law, Dr. Wasastjerna shows that the origins of competition law enable a flexible approach to safeguard consumer interests, but the mainstream Chicago School in the US and the ‘more economic approach’ in Europe are unfit for the digital age. Indeed, both economic approaches consider short-term price analysis as the main parameter of competition rather than non-price factors such as quality, including privacy in a dynamic environment. In this context, whereas US consumer welfare focuses only on price, EU consumer welfare focusing on price, quality, choice, and innovation is more appropriate than the US one to address privacy considerations.
Besides offering a thrilling discussion on the consumer welfare standard, Dr. Wasastjerna applies the findings to data-driven cases such as the Facebook/WhatsApp merger and the above German Facebook case. Aware of the difficulty to assess non-price factors due to their subjective and multidimensional nature, Dr. Wasastjerna explores different ways to examine privacy ranging from analytical methods trying to determine a price to data to the use of behavioural economics studying how consumers behave.
Putting aside the legal and economic discussion on market definition and market power, the fundamental steps of any antitrust and merger cases, the book thus proposes a clear value to the current debate on how regulators should analyse non-price factors. The book goes even beyond privacy by arguing that its findings are valuable for other key discussions such as sustainability, a major topic in Europe with the competition policy contribution to the green deal.
Even though Dr. Wasastjerna did not delve into regulation at a time where legislators worldwide consider regulating large online platforms with ex-ante asymmetric rules like in the EU, the UK, the US, Germany, China, and Japan, the book provides clear explanations on key concepts underlying those rules such as fairness and freedom of choice.
Finally, as a lawyer, Dr. Wasastjerna proposes practical recommendations to firms and regulators to tackle digital competition issues. In particular, she stresses the need for collaboration between regulators when various policies interlink, such as competition law, consumer protection, and data protection law.
In sum, Competition, Data and Privacy in the Digital Economy: Towards a Privacy Dimension in Competition Policy? is valuable work at the crossroad of competition and privacy for any scholars, practitioners, and policymakers.
Christophe Carugati is a doctor in law and economics on Big Data and Competition Law (Paris II University). His research focuses on the adaptation of competition law to the data-driven economy and the regulation of platforms. He is also a Senior Policy Analyst at the Center for Data Innovation. He reviewed this book as a researcher at Paris II University (and not in his capacity as Senior Policy Analyst at the Center).