Antitrust law will not address misuses of personal data

Introduction

In January 2021, Meta announced an “update” to its privacy policy with respect to WhatsApp? , which would allow WhatsApp to share data pertaining to users’ interactions with businesses on WhatsApp to target ads across its platforms, including Facebook and Instagram.

This form of data sharing (which is by no means new) has far-reaching implications with respect to users’ right to privacy.

Antitrust law as a well-meaning but unrealistic fallback tool

In the absence of federal data protection legislation, some have speculated whether antitrust law could be relied on as a fallback tool to address such conduct as unlawful monopolization under Section 2 of the Sherman Act.

A theoretically attractive avenue

The benefits of this recourse, relative to Section 5 of the FTC Act (the only currently available tool to deal with data privacy violations), are, first, a greater amount of resources given that antitrust investigations can be brought by the FTC, the DoJ and even State AGs for violations of federal antitrust law. These agencies moreover have significant experience in taking infringing companies to court as well as in dealing with data-intensive markets through their M&A work. Finally, their enforcement capabilities are greater than those of the FTC’s consumer protection department in that they may request structural separation of companies behaving anti-competitively, which are likely to be more impactful than mere slap-on-the-wrist fines.

An unrealistic avenue in practice

While the antitrust avenue is available in theory, it remains a highly elusive one in practice. This is primarily due to the fact that antitrust enforcement is inherently political and policy-driven, and that structural remedies alone are unlikely to solve the problem.

The FTC and the DoJ are political creatures

The enforcement priorities of the FTC and the DoJ are largely dictated by whoever is in power at the time given that the FTC Commissioners and the USAG are nominated by the President and confirmed by the Senate. This means that in order for those agencies to demand that Big Tech actors be broken up, there must be some political consensus that that is a desirable outcome.

Such consensus does not currently exist. The very foundation of the U.S. economy is based on profit-maximization, and the fact that the Metas of the world have succeeded in growing into the behemoths they are today is laudable in that context and they should not be punished for now exercising the market power they have earned in the pursuit of profit-maximization. This combined with the Chicago school of thought largely colors how antitrust law has been approached in the U.S. since the 1970s. Many elected politicians still adhere to those principles and will not condone tampering with some of the greatest success stories of Silicon Valley and, by extension, the U.S.

The current political climate moreover does not lend itself well to supporting the breakup of those companies that the government is currently relying on heavily to access data that is extremely useful to its foreign policy and defense efforts. Several reports (see here and here) have confirmed that the authorities can and do access e.g. WhatsApp? users’ data and metadata and, in that context, that "US intelligence [has] used faulty encryption to spy on [countries] across the globe" (see here). Those practices likely extend to the U.S.’s involvement in the Ukrainian war (see e.g. here). U.S. politicians therefore currently have no incentive to aggravate the companies that feed them this valuable information.

Political bias in the judiciary

An additional hurdle comes from the role of the judiciary in antitrust law. Under the chairmanship of neo-brandeisian Lina Khan, the FTC is currently demanding the breakup of Meta through divestiture of Instagram/WhatsApp to remedy its alleged violation of Section 2.

Even assuming that the FTC will follow through on that request, such radical remedies would then need to be approved by a court which is highly unlikely, once again as the result of political bias even within the judiciary. While federal judges are supposed to uphold the sanctity of the principle of separation of powers and “make decisions based on a dispassionate application of the law to the facts at hand, with no regard for the political ramifications of that decision,” the reality is that judges are also "political actors who want to shape the world to match an ideology, and who use law [as] a tool to achieve that goal” (see here). Federal judges are also nominated by the President and confirmed by the Senate, and will evidently seek to push the political agenda of whoever appointed them.

The inefficacy of structural remedies

Finally, even assuming that the breakup of Meta is granted by a court, experts argue that this would have no meaningful impact.

First, a potential spin-off of WhatsApp? would not affect personal data that Meta has already collected. Second, Meta can easily “enter into a B2B “data-sharing agreement providing them with the exact same data they held prior to the spinout.”” In order to be effective, the divestiture would need to be coupled with some “mechanism so people could opt-out of sharing or specify what they […] don't want shared” (see here), a highly unlikely outcome.

Conclusion

Whether Big Tech is held accountable for misuse of personal data on the antitrust or consumer protection arena will therefore depend on whether there is political appetite to tamper with some of the most powerful and revenue-generating companies in the country. Such political appetite does not currently exist and the ongoing Ukrainian crisis, in which the U.S. has taken an active role and in the context of which it relies heavily on Big Tech, is likely to further feed into that general disinterest.

The majority of U.S. voters moreover do not want greater intervention. In order to disrupt the status quo, a radical change in how members of the general public, and in particular younger generations, perceive data violations by Big Tech is warranted so as to in turn awaken the political appetite to act.

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