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Joshua D. Wright; Elyse Dorsey, Antitrust Analysis of Big Data, 2 CLPD 35, 41 (2016).

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Competition L & Policy Debate 35.

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1. Introduction
The term big data evokes a variety of contexts,
encompassing many of the most frequently
encountered in the modern economy. Consumers
participate in the creation of big data when they
check their email, use their favorite apps on their
tablets and phones, and put on their Fitbit in the
morning. Firms are constantly trying to collect,
compile, analyze, and utilize this vast and varied
information-not only from individuals, but
also across economic sectors, in areas relating to
healthcare, education, weather, supply chains,
andon and on. Big data has, in fact, played a
revolutionary role in many economic sectors,
opening up new possibilities for both firms and
consumers.
With its unrelentingly expansive scope, it seems
perhaps inevitable that big data would enter as
an important component in antitrust discussions.
After all, competition laws seek directly to oversee
the proper functioning of economic markets, of
which big data is an increasingly prevalent part.
While big data raises important questions for
antitrust to consider, its revolutionary nature in the
underlying economic markets does not necessarily
imply that big data's role isequally revolutionary in
antitrust analysis itself.
Seeming to rely upon its dramatic effects upon
the underlying landscapes at issue, however,
many have argued that big data compels
important and fundamental changes to antitrust
analysis. Commentators have contended not
only that antitrust's market definition tools and
analysis should expand to consider big data as
its own relevant market (even when data isnot
the commodity being bought or sold), but that
current merger analysis and exclusionary conduct
tools are likewise inadequate to address big data
challenges.
While big data can certainly present interesting
antitrust issues, these issues are by no means
unique. Indeed, as developed below, the existing
antitrust framework iswell equipped with
sophisticated tools and methods for analyzing just
the kinds of issues big data presents. To accurately
frame the inquiry, Part 2 provides background
as to the characteristics defining big data. Part 3
then analyzes the proper role for antitrust in the
big data revolution, focusing upon three popularly
targeted areas of change: (3.1) market definition,
(3.2) merger analysis, and (3.3) exclusionary
conduct. Part 4 concludes.
2. What is Big Data?
The term big data broadly applies to encompass
the vast expansion, collection, and analysis of
data and data storage that exceeds the ability
of traditional databases to manage.' A key
aspect of big data is its incredible breadth and
complexity, which drives innovative developments
in functionalities such as processing and
JAMES MANYIKA, ET AL., BIGDATA:THE NEXT FRONTIER FOR INNOVATION,COM-
PETITION,AND PRODUCTIVITY,McKINSEY & CO. (May 2011 ), http://www.
mckinsey.com/bus ness-fu nctions/digita-mckinsey/our-insig hts/
big-data-the-next-fron tie r-for-Innovation; U.S. FED.JTRADE COMM'N,BIG
DATAA TOOL FORINCLUSION 1 (2016), https://www.ftc.gov/
OREXCLUSION?,
system/fIes/documen ts/reports/big-data-too -Incusio n-o r-excIu-
sion-understanding-issues/ 60106bIg-data-rpt.pdf [hereinafter FTC
BIGDATAREPORT].

..
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 BIG DATA

management. Indeed, big data is frequently
characterized by the"3Vs"-high-volume, high-
velocity,and high-variety,2 which underscore
its multifaceted nature. Big data is big not only
because of the sheer amount of data it covers
(which is,itself,quite impressive), but also because
of its wide-ranging scope and the rapid pace at
which it both iscreated and can become stale. For
instance, it iswidely recognized that consumer
data, in particular, has a very short shelf life.,
Big data is ubiquitous today. As technologies
continue to be developed and adopted, more and
more data is being collected at an accelerating
rate. Consumer data, for instance, iscollected not
only when consumers use their credit cards at
the grocery or department store, but when they
browse online, and when they use wearables,
such as smart appliances, and various apps on
their smartphones.. Moreover, much of big data
relates not to individuals, but to nearly every
other notable segment of the modern economy,
including healthcare delivery, education,
weather forecasting, etc. This kind of data may,
in fact, be collected by multiple sources nearly
simultaneously, such that no one source isthe
only source of the data. 4 Indeed, big data is non-
rivalrous, meaning that one firm's ability to capture
this data does not mean there isany less data
2 Gartner,/17 6/o.ssry:BigDth
big-data/(Oast visite
I, at 1; Darren S. Tuc
ker, 1& ,W/ If o i Mito,
ODato, ANT'IRUSTSOUJRC
2(D. 204F ntP /w
orlooten/Oam/a So
'n kisic/nlr I l
5eTucker &' SLJ)v note 2 at
stVelltcrct,
stae qifckly. Hi storical d~ata can b an I zdf trends but has
0 mnpa rat vel y little value when uts
,dfor
ne st uvoinur
Soro A J.(ay 6 2
)rtefilV
available for other firms to collect.
It is notjust the collection of data that proliferates.
Companies and organizations both large and small
are able to use this valuable data as inputs into
their various products and services., The costs of
collecting and storing big data have plummeted
and today big data iswidely, and relatively cheaply,
available-meaning that big data isnow highly
accessible. Federal Trade Commission (FTC)
Chairwoman Edith Ramirez has, for instance,
recognized that the "phenomenal growth in
storage and analytic power means that big data is
no longer the province of a few giant companies...
[but] is now, or soon will become, a tool available to
all sectors of the economy.", As big data has grown
as an important facet of the modern economy it
has, unsurprisingly, also become an increasingly
important topic of discussion in antitrust circles.
3. What Is the Role for Antitrust
inthe Big Data Revolution?
The new and increasingly important opportunities
big data creates have raised important questions
for antitrust analysis, including what, precisely, is
the proper role for big data to play. There has been
much speculation as to when and how big data
should alter antitrust analysis. This discussion has
focused primarily, though not exclusively, upon
perceived issues that may arise in the creation
,sary/ and use of consumer data, in particular. With
i note consumers' increasing use of the Internet, mobile
( gf~ ng Big
warneic )a,. devices, wearables, etc., more and different
re e 4 IIck- activities are easily traceable and translated into
a3"l can oecorne
various uses. A somewhat quintessential example
is that firms can use tools like cookies to track
lt, Tie decisions, such
certain aspects of consumers'online interests
tured
DEI IVER
and then to serve those consumers more relevant
d Of advertisements based upon their demonstrated
na!.
nc resn NC t
interests. Some commentators have, in response to
Iy this and other consumer data scenarios, proposed

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 I BIG DATA
defining user data as its own market, advocated for
considering privacy effects in antitrust review of
proposed mergers, and suggested that such data
could create substantial barriers to entry.
None of this discussion, however, has revealed
any persuasive reason to change the manner of
the antitrust analysis. Quite to the contrary, close
review of the proffered issues reveals that they
each fit well within the existing economic and
analytical framework. This point proves true as to
market definition, merger review, and exclusionary
conduct analysis, as developed below.
3.1 Market Definition
While significant debate already exists within
antitrust circles as to whether market definition
remains a necessary-or even a particularly
useful-analytical component," some
commentators have suggested that market
definition tools should be expanded to encompass
big data as its own relevant market9 Such an
expansion, however, could exacerbate the well-
identified shortcomings of market definition as
an analytical tool. Addingto this potential harm,
commentators proposing to expand market
definition considerations have failed to articulate
why current antitrust and economic market
definition tools are insufficient such as to justify
an expansion. In fact, a detailed evaluation reveals
that no such expansion iswarranted.
Market definition has come a long way over the
years. Today, antitrust agencies routinely employ
sophisticated economic analyses, such as the
hypothetical monopolist test which measures
whether customers would substitute away from
the alleged monopoly product in the face of a small
8 See, .g., !IoulsKaplow, /Vsy F ?A~kets ?, 124
MaDfin
437 (20 10):
De-nnsWV Car t , ulfion:U
Economi Analysis Group D9sclsion Pape- (A 07 htPS:/i
usticegov/atr/rmarl!et-de, rit'Ion-use-an -b e ("[M]
www.\iw
defin!t:oFand the use af mar[<e sares are ver V rd too of
r I
n ra(
xrnJdC
A ittstAna vsis
of Bi Data
but significant price increase, to more accurately
assess the contours of markets under review."0 This
analysis focuses "solely upon demand substitution
factors, i.e., on customers' ability and willingness
to substitute away from one product to another
in response to a price increase or a corresponding
non-price change such as a reduction in product
quality or service.""
This sole focus presupposes that the product or
service at issue is in fact being sold to consumers.
Consumer data, however, is predominantly used
by firms as an input into a final product-but is
not ever the product itself. In other words, firms
are neither pricing consumer data nor otherwise
competing to provide better consumer data. In
such circumstances it would be nonsensical to
question whether the price or quality of consumer
data were being adversely competitively impacted.
Doing so would be comparable to defining a
separate market for venture capital in the same
cases-firms that currently make the most use of
consumer data are frequently high-technology
firms, including startups that rely just as much (if
not more) upon venture capital as upon consumer
data to succeed. Yet defining a separate venture
capital market in these cases would fail to shed any
additional light upon a firm's competitive position
than would be accomplished simply by defining
the actual product being sold.
"ARV, I . REV,
n Ab'Je,
arket
ls certainly does not mean tMat consumer
hI
aind data does not have a role to play as an important
pe.ti- input. It simply means that its role isjust that.
7P- The myriad and novel ways in which firms may
use consumer data, which admittedly may be
unforeseen at the time of any antitrust review, all
0 ~ I~ 6 3
 BIG DATA

factor into the firm's final product in one way or
another. There is simply no compelling reason to
separate this one input out from any of the others
and to define a discrete market around it. There
are, however, several reasons not to, including the
unwieldy framework it would establish, which has
no obvious or intuitive limits.12
consisted of "national syndicated cross-platform
audience measurement services,"which "provides
all subscribers with the same universe of data,
showing the relative national audiences for various
programming and advertising.!" is Because the
FTC further found that Nielsen and Arbitron were
the two "best-positioned" firms to develop such
16
services, it accordingly challenged the merger.

This analysis, of course, sets aside the cases in Consequently, critics seeking change frequently
which consumer data is bought and sold as the call for merger analysis to account for and
product itself. Consumer data is typically sold balance alleged privacy issues.,7 These arguments
in business-to-business transactions. Ifa firm proffer that, despite that a merger is unlikely
whose product was consumer information was "substantially to lessen competition, or to tend
allegedly monopolizing a market, or two such to create a monopoly,",is it should nonetheless be
providers were seeking to merge, then defining a found unlawful under the antitrust laws because
relevant market around that product would make consumer privacy might be negatively impacted.
eminent sense. But it would also be well aligned Some authors have noted that this argument
with current antitrust market definition, thus may be tweaked to try to characterize privacy as a
again underscoring antitrust's preexisting ability component or metric of competition, thus facially
to properly incorporate big data issues. This is, in increasing its appeal.19
fact, precisely what the FTC did in Nielsen/Arbitron
when it defined the market around individual- This characterization, however, still fails. First,
level demographic audience data for which it ignores that, to the extent firms meaningfully
Nielsen and Arbitron were "the most accurate and compete upon privacy terms, this component of
preferred sources."13 Thus, there is no compelling competition isalready considered in the antitrust
reason to expand, or otherwise to change, the analysis. If an agency investigation revealed, for
market definition framework based upon big data example, documents discussing how two firms
considerations. were competingto offer consumers better privacy
terms but that these firms would be able to
3.2. Merger Analysis
To conscript the in-vogue big data phenomenon
to a more prominent roll, commentators have 16 /d. 11
further argued that its existence should alter
merger analysis. These arguments may manifest .ompetition
syste m/fi les/
in manyways. For instance, commentators rightly I (ToF1
C vlt11
argue that mergers between firms utilizing big
data may have implications for innovation. But as
the FTC's analysis in Nielsen/Arbitrondemonstrates,
current antitrust analysis iswell equipped to
consider the likely effects on incentives to innovate
deriving from mergers between firms in big data
?0207, tosC
spaces. 14 In that matter, the FTC found the market t mep tvc icotn e 02sde)vro
at o at~rhe l'ln
>oia e the an tirs
i a tnnto t
i 2 Soe]ucker &WelI frd, supfo note 2, at 5 ("If il courts or antitrst
agencies were to define relevant markets a round inputs I ke (on- norOc f" a toi. rvayi
sumner data, antitrust analysis would becorme more complex, less he1esta rug
accurate, arid less predictable. There would be almost no end to a IwsJ
thu , fomai ene (PC) t.,
mie nmerp of relevant markets trial would reoui]reI~Pt anri 1' in\
n mmoss rid Dobelc :PcFCFl
N .7 -10(T

rds.n H o~ldings, it
113). Seeci/csoFT (FC
o pliti
)DC, 2009) (deft
Estlrnatics")for a
wg-jei lv ssi/
acao nitui l

6 Z~@ i:~ *
 II: S DATA
impose whatever terms they chose post-merger,
despite that their consumers had revealed strong
preferences for certain terms, the agency would
consider this an important competitive loss. This
kind of actual competition over privacy terms,
accordingly, does not seem to be what critics have
in mind when arguing that merger analysis should
incorporate privacy concerns. Rather, critics seem
to contemplate situations in which firms are not
competing on privacy, but in which the merged
firm may somehow have access to, or an increased
ability to use, more consumer data than the pre-
merger firm; this increased access or ability to use
data may then provide the firm more opportunities
to "improperly" utilize consumer data. But inthat
scenario, prices have not increased, nor have any
dimensions of the end product's quality decreased,
innovation has not slowed, etc. In fact, innovation
might increase following such adevelopment.
In any event, this outcome isnot what courts
or agencies would traditionally consider
anticompetitive and iswell-covered under other
consumer protection statutes and regulations,
thereby dispelling the argument that antitrust
expansion iswarranted.
The argument that merger analysis should
consider privacy concerns as a metric of quality
also falls short for several additional reasons."
Consider, for instance, that the alleged increase
in acquiring or using consumer data typically isa
cost a firm must bear rather than the kind of cost
reduction that typically follows an anticompetitive
decrease in quality. Additionally, the increased
* 8
AItt Anavssof N Data
collection or use of big data is not an inherent
qualitydiminishment. Different consumers have
very different concepts of the proper amount and
utilization of their data-not to mention that
an increase in collection or use might result in
other quality increases to the final product. Thus,
attempting to incorporate privacy would obfuscate
the actual competitive effects.
Recognizing the unsuitability of such concerns to
merger analysis, agencies have repeatedly declined
to alter their analysis to include these factors.
In the FTC's investigation of Google/Doubleclick,
for example, the Commission recognized atthe
outset that some commentators had "urged
the Commission to oppose Google's proposed
acquisition of DoubleClick based on the theory
that the combination of their respective data sets
of consumer information could be exploited in
a way that threatens consumers' privacy."21 The
Commission then emphasized that "the sole
purpose of federal antitrust review of mergers and
acquisitions isto identify and remedy transactions
that harm competition," and found that privacy
concerns did not support the FTC's blocking of
the merger." Similarly, in its investigation of the
Facebook/WhatsApp acquisition, the FTC was again
urged to block the merger not on competition but
on privacy grounds, and it again declined to do
so, instead employing its "standard approach" to
merger analysis.23
Accordingly, it would be improper and unhelpful
for antitrust merger review to try to account
for privacy concerns. Such an endeavor would
introduce tremendous confusion, uncertainty, and
risk, undermining the very competitive process
antitrust is designed to protect.
3.3 Exclusionary Conduct
Finally, some have speculated that big data
presents a tool firms may use to exclude rivals.
These arguments primarily focus upon the alleged
barriers to entry that big data may create, namely
economies of scale and network effects.24 The
21 Sttrnent of Co .s rCorcernr'g Gto l
0e/Do
0 - s al
comoetit onooiic
I~ 0 I
 BIG DATA
typical barriers to entry argument proffers that
big data's proliferation has made user information
a critical component for firms to succeed; that it
is impossible (or nearly so) for new entrants to
obtain the extensive amount of data necessary
to compete with incumbents; that incumbents
have a competitive advantage deriving from
their ongoing use of this information, which
allows them to provide a better, more tailored
end product to consumers; and that, as such, new
entrants cannot effectively enter. This theory
fails both because big data is unlikely to create
any meaningful barriers to entry and because
antitrust analysis already provides a framework for
analyzing alleged barriers to entry.
Conceptually, the big-data-as-barriers story
attempts to tether itself to the standard barriers
to entry story. This attempt issuspect, however, as
it essentially proffers that an input constitutes a
barrier to entry simply because other competitors
do not, at some point in time, have the exact same
amount (or content) of data as an incumbent.25
This conclusion is comparable to asserting that
simple capital (or employees or facilities) is a
barrier to entry because a new entrant has less
of it than the incumbent, and so cannot spend as
much to develop and enhance its product. Despite
that it would be odd, indeed, for courts or agencies
to accept that, simply because a competitor
does not have the same access to an input, that
input is a barrier to entry (without considering
other defining factors of that input, such as its
essentiality, availability, durability, etc.), some
commentators nevertheless continue to advance
this theory.
There is,moreover, ample reason to be skeptical
that big data has any particular tendency to create
U, LARE ~ ~
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ic asset thiat
limit entry 1
ritrus I: /hy 1
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such barriers to entry.2" As discussed, big data is
widely, readily, and cheaply available. Competitors
typically have the ability to acquire the allegedly
necessary data from multiple potential sources
with ease. Additionally, it iswidely recognized
that much of big data-particularly the consumer
data that most frequently arises in antitrust
conversations-has a fairly short shelf life.27 This
means that, while historical data may be of some
use to incumbents, this use istypically limited.
And an entrant that purportedly needs personal
data to operate would gain access to the most
valuable data, the up-to-date data, upon or shortly
after entering the market.
All these factors belie the notion that consumer
data tends to create insurmountable barriers
to entry or otherwise necessarily foreclose
competition. Perhaps for this reason, we continue
to see numerous and varied websites and social
media applications flourish, despite decried
incumbent monopolies. There are, of course,
the examples of Google overtaking Yahoo!
and Facebook overtaking Myspace-in both
instances, despite the widespread success of an
allegedly entrenched incumbent. But examples
of competitors entering and succeeding continue
to arise. Snapchat, for instance, launched in July
2011, over seven years after Facebook. 8 Despite the
years of consumer data Facebook had accumulated
(not to mention that it already provided a platform
for users to share pictures and videos with
friends) prior to Snapchat's existence, Snapchat
has nevertheless become wildly successful. So
much so, in fact, that Facebook has not only
tried, unsuccessfully, to purchase the app for a
staggering $3billion, but has also been avidly
attempting to "buy, copy or kill" Snapchat for some
time now.29
But even assuming that consumer data could
constitute a barrier to entry under the right
rdt a
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 I BIG DATA Antitrust Analysis of Big Data

circumstances, there is,again, no apparent tendency to create barriers to entry, owing to its
reason why current antitrust analysis requires status as a ubiquitous, low cost, non-rivalrous,
modification in any way to properly account short shelf life input, and that current antitrust
for such barriers. Courts and agencies today analysis can and does account for precisely such
frequently consider the possibility that barriers scenarios of alleged barriers to entry.
to entry exist and may distort the competitive
process, and have been doing so successfully 4. Conclusion
in many contexts, including in relation to big The big data phenomenon has, in many ways,
data. The FTC, for instance, in Google/DoubleClick revolutionized firms' operations and consumers'
analyzed the importance of data as input, but
expectations across many segments of the
ultimately concluded that the data available to
economy. Given the expansive scope of this
Google and to DoubleClick was not essential,
trend-and the likelihoodthat itwill only
noting that a number of competitors, including
continue to grow-it is unsurprising that big data
some of Google's "most significant competitors"
has sparked important conversations as to how
in the relevant market had "at their disposal
antitrust analysis can, does, and should apply to
valuable stores of data not available to Google.''3° the questions big data may raise. While many have
Similarly, in closing its investigation of Facebook! proffered that antitrust analysis must change or
Whatsapp, the European Commission found that,
"regardless of whether the merged entity will start expand to incorporate big data issues with novel
tools, a thorough analysis of these claims makes
using WhatsApp user data to improve targeted
clear that no such changes are, in fact, necessary.
advertising on Facebook's social network, there will
Courts and agencies today have many refined
continue to be a large amount of user data that are
economic tools to analyze a wide array of allegedly
valuable for advertising purposes and that are not
1 anticompetitive behavior-and big data, despite
within Facebook's exclusive control. its revolutionary characteristics in other areas,
fits well within antitrust's existing analytical
These analyses demonstrate both that consumer
framework.
data does not seem to have any particular

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