If digital platforms are found liable on hybrid antitrust-data protection violations, by how much should individual users be compensated? While traditional antitrust literature offers some estimation techniques, these methods were developed mostly around the idea that anti-competitive conduct manifests in supra-competitive prices, lost profits, or lost customers, all of which are easily quantifiable using commercially available evidence.
In digital markets, where antitrust violations are often intertwined with data protection issues, several complications arise. First, unlike transactions covered by traditional treble damage estimation techniques, “data-for-services” dealings are not evidenced by receipts. Second, personal data valuation is highly contextual and prone to volatility, considering that present exchanges are concerned with the insights derived by transacting parties to the data exchange, rather than any intrinsic value to the data. Third, a “reverse synergy” effect is observed in which, whereas a dataset increases in value when aggregated with other information pools, isolating bits of information yield significantly smaller values. Finally, there arises the issue of “efficient deterrence”—antitrust violations ambiguously produce both anti-competitive and pro-competitive effects, so the amount of civil recovery might effectively penalize efficient conduct.
My proposed method consists of benchmarking and trebling the measure of damage. By benchmarking, antitrust plaintiffs can gain a reference of personal data valuations. This can be done through two approaches: (1) willingness-to-accept (“WTA”), and (2) use-case valuation (“UCV”). The WTA approach measures by how much individuals feel they must be compensated to agree to a certain loss of privacy. Meanwhile, UCV is a demand-side approach as it appraises personal data from the perspective of those whose businesses are fueled by such data, e.g., tech platforms and digital services.
Benchmarking the value of personal data is just one element in calculating the damage inflicted through a hybrid antitrust-data protection harm. As to the platform, users are both the suppliers of personal data used for digital services as well as end-consumers of these services. Accordingly, the value of the personal data can be thought of as the price that users pay for platform services or as the cost to the platform of a necessary input. Meanwhile, the digital services are the compensation to users as both suppliers and consumers of the platform services. Given this framework, the computation of damages turns on a comparison of the platform user’s costs and payoffs relative to the but-for scenario where the antitrust violation was not committed.
Jose M. Marella,
QUANTIFYING CIVIL RECOVERY IN HYBRID ANTITRUST-DATA PROTECTION HARMS,
19 Wash. J. L. Tech. & Arts
Available at: https://digitalcommons.law.uw.edu/wjlta/vol19/iss1/4