Data Privacy Is The Price Of The Latest Antitrust Proposals

from the when-policies-conflict dept

In the wake of data breaches at Target and Equifax where hackers compromised the personal information of millions of Americans and the Cambridge Analytica scandal, customers and policymakers are increasingly worried about the privacy and security of our personal information online. Unfortunately, policymakers often confuse these privacy and data security concerns with broader anti-tech fervor against America’s leading technology businesses. But simply put, kitchen-sink anti-tech responses could exacerbate, not ease, concerns regarding data privacy and security.

Sen. Klobuchar’s American Innovation and Choice Online Act proposed in the Senate this month provides a clear example of how “solutions” driven by animosity towards “Big Tech” could undermine consumer privacy. Lawmakers who are currently pushing antitrust proposals to attack tech businesses are creating a scenario where companies might be unable to undertake the privacy and security features that their consumers trust and rely on.

This latest legislation would undermine existing privacy features and lead to more risky sharing with third-parties which has been at the heart of many privacy scandals. By making it illegal for the tech giants covered by the law to “restrict or impede” a business user’s access to data created through the platform or to limit portability, the result is simple—this will likely undermine companies’ attempts to improve consumer privacy such as Apple’s new App Tracking Transparency. In most cases, this bill also requires companies to share their data with rivals, even those that might have ill-intentions against the company, its consumers, or even the United States. 

Thanks to the requirements in the American Innovation and Choice Online Act, malicious businesses, including foreign companies, could exploit its data portability loophole and gain access to user information. It opens up businesses to the very actions at the heart of other previous data privacy scandals and dilutes their ability to respond with what consumers want—better security and privacy options. And as a result, Klobuchar’s antitrust proposal would likely harm users’ privacy online and create more harm to consumers than the current tenuous claims about tech giants' market behavior.

This bill won’t just harm consumer privacy, it’ll harm small businesses to boot. Under the Klobuchar bill, Amazon, Google, Microsoft, and Apple would not be able to limit the use of data by those with questionable or unethical data practices and would be greatly limited in their ability to remove fraudulent apps or other awful actors from their app stores.

These companies would generally have two options: either accept all sellers into their phones and app stores, regardless of poor data privacy and security standards, distasteful products, and customer service quality, or end these programs altogether to avoid accusations of self-preferencing and significant consequences associated with it under Klobuchar’s bill. 

Both options would mean consumers likely lose the benefits of knowing that only approved apps can access their data, while developers of these apps and other small businesses that use these services would not benefit from the consumer trust these marketplaces currently provide. 

The interoperability requirements of the bill also fail to truly provide the users themselves with the increased options. Instead, they make user data and to whom it can be ported further subject to the decisions of companies and third-parties. New opportunities for data portability between platforms can provide users more control and lower the cost of switching between services. Take the Data Transfer Project, which allows users to choose to transfer certain data like photos between project member services. This gives users more options for where they can choose to keep such information. But the Klobuchar proposal structurally doesn’t help users and would require companies to provide portability and interoperability to other companies,not to the users themselves.

Proponents of Klobuchar’s bill will likely point out that the bill establishes an affirmative defense to avoid these requirements if it would undermine privacy. However, this still would not solve all the concerns. Companies that pursue that route would face a high burden in court and the high costs associated with litigating such a case. As a result, many companies will favor compliance and handing over consumer data rather than risk the penalties if an affirmative defense fails, even if they believe consumer privacy may ultimately be undermined. In fact, the inclusion of an affirmative defense wouldn’t even be sufficient to overcome the additional privacy problems that Klobuchar’s bill would create.

Rather than resolving data privacy concerns, antitrust proposals like Senator Klobuchar’s could make keeping our information safe online an impossible task for tech companies. Policymakers should not have consumers and small businesses pay an unfair price and lose privacy protections just so they can go after big tech companies.

Jennifer Huddleston is Policy Counsel at NetChoice where she focuses on emerging technology issues like privacy, competition policy, and intermediary liability.

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Filed Under: american innovation and choice online act, amy klobuchar, antitrust, competition, data portability, privacy