• by Wendy Davis  @wendyndavis, June 11, 2019

Efforts to boost competition in Silicon Valley can also promote privacy, U.S. antitrust chief Makam Delrahim suggested Tuesday.

“By protecting competition, we can have an impact on privacy and data protection,” Delrahim said in a speech delivered at an antitrust conference in Tel Aviv.

He added that market consolidation can harm consumers in ways that go beyond price increases. “Diminished quality is also a type of harm to competition,” Delrahim said. “Privacy can be an important dimension of quality." 

He went on to suggest that companies in a competitive environment will be more likely to offer more consumer-friendly policies on privacy, free expression and other matters.

“Two companies can compete to expand privacy protections for products or services, or for greater openness and free speech on platforms,” he said. “Where competition pushes companies to develop quality elements that better satisfy consumer preferences, our enforcement can protect that sort of competition.”

While Delrahim didn't criticize the current data practices of specific Silicon Valley companies, he noted that large tech companies face little competition.

“The current landscape suggests there are only one or two significant players in important digital spaces, including internet search, social networks, mobile and desktop operating systems, and electronic book sales,” he said. “This is true in certain input markets as well. For example, just two firms take in the lion’s share of online ad spending.” 

In addition, Delrahim said that even when companies offer products for free, or at low prices, the companies can still violate antitrust laws.

"Price effects alone do not provide a complete picture of market dynamics, especially in digital markets in which the profit-maximizing price is zero," he said.

He went on to quote journalist, and Big Tech critic Franklin Foer, who recently told Wired: “Who can complain about the price that Google is charging you?  Or who can complain about Amazon’s prices; they are simply lower than the competition’s.”

Delrahim also indicated that the Justice Department will take a hard look at potential mergers in the technology field.

“Acquisitions of nascent competitors can be procompetitive in certain instances and anticompetitive in others,” he said. “They can be beneficial to the extent they combine complementary technologies or bring products and services to market ... but I will note the potential for mischief if the purpose and effect of an acquisition is to block potential competitors, protect a monopoly, or otherwise harm competition by reducing consumer choice, increasing prices, diminishing or slowing innovation, or reducing quality.”