In a new research brief, Data Price Gouging: A Stalking Horse for a Neo-Brandeisian Antitrust Doctrine?, I dissect a hypothetical argument aimed at establishing the existence of anticompetitive harms due to “excessive data-pricing.”

In preliminary findings from December 2017, the German Federal Cartel Office (FCO) found that Facebook abused its market power to essentially coerce users to relinquish control of their data — a violation of German citizens’ constitutional “right to informational self-determination.” However, recent comments suggest that the FCO’s forthcoming final report may allege broader anticompetitive practices under a theory of “excessive pricing” of data. While such an approach may appeal to the desires of some populist antitrust advocates in their quest to uproot the consumer welfare standard, attempting to invoke a “data price gouging” theory of harm, absent clear evidence, could rock the foundations of the digital economy.

Based on the available evidence provided in the FCO’s preliminary report, I briefly attempt to sketch what such an argument might look like, followed by a critical examination of the FCO’s current findings. Throughout the brief, I note the agency’s analysis is impaired by a number of significant methodological flaws, and conclude that many of the claims of harm are unsubstantiated by the evidence.

From the executive summary:

This brief examines the broad contours of the ongoing debate over antitrust analysis and its application to online service platforms that compete on non-zero prices. In particular, it examines these issues in the context of the recent preliminary findings from Germany’s Federal Cartel Office regarding Facebook’s purported abuse of market power. Using the facts of that case, this brief hypothesizes what a theory of “excessive pricing” in data might look like as a means of establishing the existence of anticompetitive harms. The ensuing analysis then looks at whether Facebook is indeed in a position to abuse market power, whether the Federal Cartel Office’s analysis appropriately identifies the company’s competitive market, and if it is in fact possible to reasonably assert a theory of “data price gouging” given the facts as described. The brief argues throughout that the answer to all three questions is a resounding no.

Read the full brief here.