Privacy-As-A-Quality Parameter of Competition

Abstract

Recent decisions from the European Commission recognise privacy as an important parameter of non-price (quality) competition in markets for communication services and professional social networks. This development acknowledges that privacy could be subject to competition as an element of quality, choice or innovation and thus a merger can reduce the incentives to compete based on this parameter. However, there is much uncertainty and scepticism as to what constitutes reduction in privacy, the incentive to reduce privacy and the ultimate anticompetitive effect of such a reduction. This chapter identifies and reflects on some of these uncertainties and scepticisms surrounding the privacy-as-a-quality parameter, including the lack of a link between privacy harms and accumulation of too much information; the lack of economic incentive to reduce privacy; the alleged trade-off between privacy harms and other quality improvements; and the role that data privacy law can play in understanding the degradation of privacy.