Big Data and Competition 

Policy: A US FTC Perspective

Alden F. Abbott

General Counsel, U.S. Federal Trade Commission

Penn Wharton China Center, Beijing, China, July 6, 2019

(Views set forth herein are solely attributable to me)
Introduction

• Delighted to be here today, my thanks to Professor Christopher Yoo

for having invited me, as well as to the three cosponsoring 

institutions, the University of Pennsylvania Law School’s Center for 

Technology, Innovation, and Competition; the Universität Mannheim; 

and the University of International Business and Economics.

• The views expressed today are my own, they are not attributable to 

the Federal Trade Commission or any Federal Trade Commissioner.

• Today I will discuss the FTC’s enforcement approach with regard to 

“big data,” and comment on the way in which U.S. competition law 

agencies approach matters having a “big data” component.
Big Data: The Big Picture

• Before turning to specifics, let me take a very high level look at 

potential competitive issues raised by possession and use of big data.

• A 2016 FTC report explains that the term “big data” refers to a 

confluence of factors, including the nearly ubiquitous collection of 

consumer data from a variety of sources, the plummeting cost of data 

storage, and powerful new capabilities to analyze data to draw 

connections and make inferences and predictions.

• It is a mistake to discuss “big data” in the abstract. Access to big data, 

alone, should not be presumed to create market power or 

competitive advantages such as entry barriers.
The Big Picture, continued

• 3 big data characteristics caution against assuming that the 

possession of bid data automatically conveys market power: (1) many 

types of data are readily available and replicable; (2) multiple entities 

can often collect and use the same set of data without foreclosure 

concerns; and (3) data can quickly become obsolete.

• Thus, it is necessary to determine whether big data create a 

competitive concern on a case-by-case basis. Whether control of a 

particular type of data harms the competitive process will depend on 

the specific markets at issue.
The Big Picture, continued

• Competition authorities should carefully analyze what (if any) competitive 

advantages stem from mere possession of a data set. 

• Shelf life may be short, much data may become obsolete relatively quickly. The focus should 

be on potential for actual competitive effects, such as the creation and strengthening of 

entry barriers and market foreclosure.

• U.S. antitrust law disfavors requiring access to an “essential facility,” e.g., big data (see 

Verizon v. Trinko (2004), severely limiting essential facility claims). 

• See 2014 FTC Report on Data Brokers (data available and abundant from many sources)

• Treating the mere possession of data as a barrier to competition could have a 

significant chilling effect on innovation. Concerns about foreclosure risks 

stemming from network effects must be weighed against efficiency benefits 

generated by such effects. 

• Does big data holder engage in exclusionary behavior? (monopolization).

• Will combining big data holders threaten credibly to reduce competition in 

particular markets? (merger analysis). 
Big Picture, continued: Monopoly Leveraging

• U.S. antitrust law does not recognize a standalone monopoly leveraging 

offense, i.e., use of monopoly in one market to gain competitive advantage 

in a second market.

• In a leveraging scenario involving a monopolist, US law finds no violation 

unless monopoly is seriously threatened (there must be a “dangerous 

probability of success” in monopolizing second market, Verizon v. Trinko). 

• Many forms of “leveraging,” such as technological ties, can represent an 

efficient form of product intergration or product enhancement that 

benefits consumer and is therefore procompetitive. Thus, as a practical 

matter, monopoly leveraging highly is viewed most skeptically in the U.S. 

• The EU and other jurisdictions find abuse of a dominant position in the first 

market when competition is merely distorted in the second market. 
Big Picture, continued – Remedies 

• AS TO PROPOSED REMEDIES, note that legally mandated data access, data sharing, or 

data pooling involves significant administrative costs. 

• There may be less incentive to develop a collection of data if it is likely that the collection will be subject to forced sharing. Mandatory sharing may also cause enhanced risks of 

cartelization. 

• To the extent remedies are required to offset anticompetitive effects connected to the control of a set of data, those remedies should be narrowly tailored to specifically 

address the perceived harm. 

• When antitrust does intervene, competition agency should ensure that (1) feasible remedies to address the competitive concern exist; and (2) those remedies do not pose 

their own prohibitive costs or other risks to the competitive process. 

• Take care that any remedy does not lead to worse competitive outcomes, whether due to a chilling effect on incentives to innovate or due to the increased risk of collusion that 

information sharing presents. 
FTC Tech-Related Antitrust Enforcement

• The FTC’s antitrust enforcement wing, the Bureau of Competition, formed 

a Technology Task Force in February 2019 dedicated to monitoring 

competition in high tech markets, taking appropriate enforcement actions.

• The Task Force is monitoring tech products and services, including 

industries within the online advertising, social media, software and 

application, and mobile spaces. Along with exploring industry practices 

and law enforcement investigations, the Task Force will review 

consummated and proposed technology mergers.

• Big data issues will, of course, be confronted by the Task Force.

• Big data issues were also examined at recently concluded FTC Hearings on 

Competition and Consumer Protection in 21st Century, stay tuned for 

possible FTC policy developments based on the findings of the Hearings.
Special Aspects of Big Data and Platforms

• Specialized data related to personal information — think real estate records or 

credit data — have previously been subject to antitrust enforcement actions. 

• In today’s online world, however, the antitrust debate centers around how to 

treat data about or created by consumers that is collected through online 

platforms and used by these entities to target ads, improve current offerings, and 

create new products. This type of consumer data is often an input for other 

products and services. 

• For example, Waze (owned by Google) collects and aggregates the location and 

speed of travel of individual users’ phones and uses it to produce dynamic trip 

directions based on changing traffic conditions. 

• Consumer data is also a commodity asset for advertisers, allowing them to target 

their ads more precisely, which makes those ads more valuable and thus allows 

the platforms that hold such data to charge a higher price for that advertising 

space than other advertising channels.
Data Issues in U.S. Merger Enforcement

• U.S. merger enforcers have examined data-related issues, examples below. 

• For instance, in Bazaarvoice (2014), the Justice Department (DOJ) successfully challenged a 2012 consummated merger involving companies that provide 

software platforms for online ratings and reviews (“R&R”) of products created by 

consumers that manufacturers and retailers host, share, distribute, and display. 

The court found a relevant market for R&R platforms, noted that the merging 

parties had called themselves duopolists in this market, and found that the 

merged firm likely would be able to charge monopolistic prices. In a settlement of 

the case, DOJ required Bazaarvoice to divest all of the assets it had acquired in 

2012. 

• And in a series of mergers involving entities with databases of public real estate 

records used for title insurance underwriting (called title plants), the FTC required 

the merging parties to sell a copy of their title plant.

• For other examples, see Sher & Yost, US: Digital Platforms (Ant. Rev. Am. 2019).
U.S. Merger Enforcement, continued

• In Corelogic (2014), CoreLogic, Inc. agreed to settle FTC charges that its 

proposed $661 million acquisition of DataQuick Information Systems, Inc. 

from TPG VI Ontario 1 AIV L.P. would likely substantially lessen competition 

in the market for national assessor and recorder bulk data. The FTC’s 

settlement order required CoreLogic to license to Renwood RealtyTrac

national assessor and recorder bulk data as well as several ancillary data 

sets that DataQuick provides to its customers. The order allowed RealtyTrac

to offer customers the data and services that DataQuick now offers and to 

become an effective competitor in the market.

• A 2018 FTC order modification (in light of poor compliance) required 

CoreLogic to provide bulk data to RealtyTrac until at least 2022, an 

additional three years beyond the term in the 2014 order.
U.S. Merger Enforcement, continued

• In 2015, DOJ sued to block Cox Automotive’s acquisition of Dealertrack. Cox owns the 

AutoTrader and Kelley Blue Book brands. 

• As part of its acquisition, Cox sought to purchase Dealertrack’s inventory management solution business (“IMS”) — a business unit devoted to providing analytics and algorithms to assist car dealers with the management of their vehicle inventory. 

DealerTrack also held ownership of valuable vehicle information data. 

• DOJ was concerned that Cox would not only become an effective monopolist in the IMS 

market but also would acquire valuable vehicle information data that served as inputs to 

IMS businesses. With control over that data, Cox could “deny or restrict access” to the 

data “and thereby unilaterally undermine the competitive viability of Cox’s remaining 

IMS competitors.” 

• To allow the deal to go through, DOJ not only required Cox to divest the IMS portion of 

Dealertrack’s business, it also required Cox to enable the continuing exchange of data and content between the websites it owns and the divested IMS business. 
U.S. Merger Enforcement, continued

• In CDK/Auto-Mate (2018), FTC sued to block a merger of two digital 

tech platforms where firms were current competitors, but one was a 

market giant—close to a duopolist—while the other was far smaller. 

• Complaint alleged harm to current competition, but focused even 

more sharply on harm to future, or nascent competition. That harm 

arose from the smaller competitor’s substantial efforts to remake 

itself into a greater competitive threat going forward. The transaction 

was abandoned by the parties after the FTC filed suit.

• This case illustrates FTC’s ability to deal with threats to nascent 

competition through mergers employing existing legal tools. 
Monopolization and Big Data

• U.S. monopolization law can be applied when appropriate to counter 

anticompetitive actions (“exclusionary conduct”) involving big data

• Professor Hovenkamp, the leading U.S. treatise writer, concludes that exclusionary conduct involves acts that “are reasonably capable of creating, 

enlarging or prolonging monopoly power by impairing the opportunities of 

rivals [need not show actual harm]; and (a) do not benefit consumers at all, or (b) are unnecessary for the particular consumer benefits the acts 

produce, or (c) produce harms disproportionate to the resulting benefits”

• Key U.S. monopolization decision is Microsoft (D.C. Circuit 2001 en banc), in which the entire U.S. Court of Appeals for the D.C. Circuit (sitting en banc) asked “whether as a general matter the exclusion of nascent threats is the type of conduct that is reasonably capable of contributing significantly to a defendant’s continued monopoly power” – widely cited by U.S. courts and scholars and readily applicable to cases involving high tech and big data
More on U.S. v. Microsoft (2001)

• D.C. Circuit found Microsoft violated Sherman Act § 2 by commingling 

computer code for its Windows operating system and its Internet Explorer 

(IE) web browser, requiring all Microsoft Windows purchasers to accept 

pre-installed version of Explorer as well.

• Since computer manufacturers did not want to support 2 versions of same 

program, effect of commingling was virtually to eliminate chief IE rival, 

Netscape, from original distribution part of browser market.

• This in turn made it much harder for Netscape to develop tools to make 

computers compatible with different operating systems, thus letting 

Microsoft inefficiently maintain its operating system monopoly.

• No plausible procompetitive justification for Microsoft’s commingling. 
Digital Platforms and Antitrust: AmEx Case

• In Ohio v. American Express (2018), the U.S. Supreme Court required 

examination of effects on both sides of AmEx’s digital platform – services 

to merchants and services to cardholders. 

• It thus held that higher nominal prices to merchants due to Amex contract 

clauses barring merchants from “steering” customers toward using other 

credit cards did not show a prima facie anticompetitive effect – quality and 

output on the merchant side of the market also had to be examined to 

determine if there was competitive harm.

• The Court stressed this case involved a “transactions platform” in which a 

sale required parties on both sides of platform to simultaneously agree to 

use AmEx’s services. Not all platforms required a “two-sided” market 

definition to carry out antitrust analysis (future impact of case uncertain). 
FTC Platform-Related Monopolization Case

• In April 2019, FTC sued health information company Surescripts (SS) in federal district court, 

alleging that the company employed illegal vertical and horizontal restraints in order to maintain 

its monopolies over two electronic prescribing, or “e-prescribing,” markets: routing and eligibility.

• E-prescribing provides a safer, more accurate, and lower-cost means to communicate and process patient prescriptions than traditional paper prescribing. 

• FTC alleged SS monopolized two separate markets for e-prescription services: The market for 

routing e-prescriptions, which uses technology that enables health care providers to send electronic prescriptions directly to pharmacies; and the market for determining eligibility, a 

separate service that enables health care providers to electronically determine patients’ eligibility 

for prescription coverage through access to insurance coverage and benefits information. 

• FTC asserted that SS intentionally set out to keep e-prescription routing and eligibility customers on both sides of each market from using additional platforms (a practice known as multihoming), using anticompetitive exclusivity agreements, threats, and other exclusionary tactics. 

• Among other things, FTC alleged that SS took steps to increase the costs of routing and eligibility multihoming through loyalty and exclusivity contracts. According to the FTC’s complaint, SS 

successfully used these tactics to stop multiple attempts by other companies to enhance competition in the routing and eligibility markets. 
Competition-Consumer Protection Issues

• Finally, what about interrelationship, if any, between competition and 

consumer protection concerns regarding big data?

• Sharing as a competition remedy has traditionally been invoked where data 

is difficult or expensive to create, raising an entry barrier that keeps out 

competitors who need access to such data. In the U.S., this has been 

imposed typically in a merger analysis, where two holders of such a data 

set want to combine (see previous discussion).

• By contrast, the concern driving privacy law, like the European Union’s 

General Data Privacy Regulation, or GDPR, is that consumer data has 

become too widely available, with a perceived loss of consumer control. 

The GDPR’s remedy adopted for privacy concerns limits collection and 

restricts sharing of data, except at the consumer’s direction. 

• Tension between competition and consumer protection approaches? 
Competition-Consumer Protection: Update

• On July 23 DOJ announced it has opened a broad antitrust review of bit tech 

companies (WSJ – investigation was prompted by “new Washington threats” from Facebook, Google, Amazon, and Apple).

• On July 24 Facebook revealed it is under FTC antitrust investigation.

• Antitrust and consumer protection raise different issues/concerns.

• For example, in July 24 press conference discussing settlement order between FTC and 

Facebook over Facebook’s defective privacy practices, an FTC staffer stressed that deceptive 

conduct at heart of this settlement implicated consumer protection concerns, not antitrust 

concerns.

• In February 2019 the German competition agency (BKT) held that Facebook 

abused its market dominance in Germany by conditioning use of its social 

network on the collection of user data from multiple sources, and ordered 

Facebook to change the way it collects data from German users.

• In August 2019 the Higher Regional Court of Dusseldorf expressed “serious doubts about the 

legality” of this decision, and suspended it pending a final verdict – BKT is appealing. 
Conclusion

• The new high tech platforms and their use of large collections of data 

raise major questions under both competition and consumer 

protection law, in multiple jurisdictions. 

• My comments, which represent only my views, have only scratched 

the surface. Expect additional enforcement actions and policy 

development here.

• Big digital platforms raise various other important policy issues (of 

course), such as platforms’ roles in mediating speech by users and the 

supervisory (or regulatory) role of government, that are beyond the 

scope of my presentation.