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Illustration: Aïda Amer/Axios

Regulators on both sides of the Atlantic are beginning to probe whether the biggest tech companies' handling of consumer data represents an unfair form of competition.

Why it matters: Consumer data is the fuel of the digital economy and the key to tech giants' market leverage. It is also challenging antitrust regulators’ ability to investigate competition issues, because today’s antitrust laws don’t specifically address data dynamics.

Driving the news: Justice Department antitrust chief Makan Delrahim, in a speech Friday at an antitrust conference in Cambridge, Mass., said that the way tech firms amass data could raise concerns about competition.

  • The DOJ is conducting an antitrust review of big tech companies, and Delrahim told the crowd that includes studying the role data plays in market power.

Context: The amount of data Google will collect in its $2.1 billion acquisition of Fitbit is already drawing the attention of privacy advocates and competition enforcers.

  • European Union antitrust chief Margrethe Vestager said deals that involve combining user data will get a close look because of their potential to hamper competition or create privacy issues, in response to questions about the Google deal at the Web Summit in Lisbon last week, according to Bloomberg.
  • Marc Rotenberg, president of the Electronic Privacy Information Center, said the organization will oppose the deal in part because of privacy issues. (Google has said it will not use Fitbit data for ads.)
  • EPIC is also urging lawmakers to press the FTC on data collection in merger reviews ahead of a House Judiciary antitrust subcommittee hearing Wednesday with Delrahim and FTC Chairman Joe Simons.
  • In a statement for Axios, subcommittee chairman David Cicilline (D-R.I.) said, "The immense amount of data that dominant firms have collected has given them a tremendous advantage over potential competitors whose ability to attract investment and compete effectively often depends on their access to data."

Yes, but: Fitbit is not the dominant player in the wearables health device market — that honor goes to the Apple Watch.

  • Google and Fitbit also do not closely compete in the market, so Google's entry doesn't really eliminate competition between the two, but instead could pose a stronger competitive threat to Apple.

More broadly, experts question whether antitrust laws are the right tool to remedy concerns about growing data collection.

  • "The enforcers see these companies getting big, they see them accumulating lots of personal data and they don't have a statutory framework to analyze or investigate that in the privacy realm, so they are borrowing from the antitrust realm, and it’s a bad fit," said Joel Mitnick, an antitrust lawyer with Cadwalader, Wickersham & Taft.
"The only thing you can say in the antitrust realm in regard to companies’ increasing possession of data is 'big is bad,' and 'big is bad' is a disreputable antitrust principle and has been for decades."
— Joel Mitnick
  • In Europe, Vestager, who now has expanded regulatory powers, may impose new rules on tech companies' data use, per a Reuters report.
  • “If we want to define the market, to set out what’s acceptable and what isn’t, then what we need is not more competition enforcement. We need regulation," she said, according to the report.
  • The EU's General Data Protection Regulation includes a hefty fine for privacy violations to create an incentive structure around privacy that would be as punitive as competition violations.

Meanwhile, Congress is looking at new data portability legislation as a way to boost competition in the tech industry by allowing users to take information like friends lists from one platform to another.

  • Democratic Sens. Mark Warner (Va.) and Richard Blumenthal (Conn.), and Republican Sen. Josh Hawley (Mo.) introduced a bill last month that would require social media companies to provide a way for customers to move their personal information to another platform.
  • Rules requiring phone companies to allow customers to keep their number when switching providers are credited with increasing competition among wireless carriers.
  • But that approach might be a tougher fit for personal information on digital platforms, where there's no standard format of exchange.

Go deeper

Tech scrambles to derail inauguration threats

Illustration: Sarah Grillo/Axios

Tech companies are sharing more information with law enforcement in a frantic effort to prevent violence around the inauguration, after the government was caught flat-footed by the Capitol siege.

Between the lines: Tech knows it will be held accountable for any further violence that turns out to have been planned online if it doesn't act to stop it.

Dave Lawler, author of World
1 hour ago - World

Uganda's election: Museveni declared winner, Wine claims fraud

Wine rejected the official results of the election. Photo: Sumy Sadruni/AFP via Getty

Yoweri Museveni was declared the winner of a sixth presidential term on Saturday, with official results giving him 59% to 35% for Bobi Wine, the singer-turned-opposition leader.

Why it matters: This announcement was predictable, as the election was neither free nor fair and Museveni had no intention of surrendering power after 35 years. But Wine — who posed a strong challenged to Museveni, particularly in urban areas, and was beaten and arrested during the campaign — has said he will present evidence of fraud. The big question is whether he will mobilize mass resistance in the streets.

Off the Rails

Episode 1: A premeditated lie lit the fire

Photo illustration: Sarah Grillo/Axios. Photo: Chip Somodevilla/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 1: Trump’s refusal to believe the election results was premeditated. He had heard about the “red mirage” — the likelihood that early vote counts would tip more Republican than the final tallies — and he decided to exploit it.

"Jared, you call the Murdochs! Jason, you call Sammon and Hemmer!”