and worldwide have continued to express deep concerns about Big Tech firms and their extensive collection of personal digital data, which affects how markets operate and compete. In a I coauthored with Professor Kean Birch of 91ŃÇÉ«, we dove into these policy materials, using to explore recurring themes in across various regions. Published by the , our work also sheds light on how the collection of personal data is portrayed in the latest review of competition laws, policies, and regulations, and the implications for evolving competition policy

Why Competition Policy Matters

Big Tech firms are powerful political-economic actors within the economy, especially when it comes to the mass collection and use of digital personal data. As , in a data-driven digital economy, they can therefore shape and dominate markets by structurally and strategically undermining competition through their constructed platforms—data-driven ecosystems that appear separate from the market. This capacity gives Big Tech firms structural and techno-economic power over their competitors, making it more important than ever for competition law to step up its game. Through a thematic policy analysis, our research reveals a series of key issues that policymakers around the world are identifying as important structural and techno-economic implications of Big Tech for competition.

Structural and Techno-economic Dimensions of Big Tech’s Market Power

A significant part of Big Tech firms’ market power lies in economies of scale, which can create tough barriers for new competitors to break through. For example, as points out, the high costs needed to start a business can be a genuine hurdle for newcomers, while established companies can handle regulatory costs much more comfortably. Additionally, the costs involved in switching from one provider to another can make users hesitant to change. As highlighted by , the digital economy has sped up the impact of these economies of scale, in part because personal data complicates how we understand market definitions in competition policy. The basic assumptions that guide competition policy often use price theory to define markets and identify anti-competitive behaviour. These competition frameworks therefore struggle to address situations involving seemingly ‘free’ goods (like search engines) or the trade of these free goods and services for personal data. , ).

Meanwhile, the techno-economic side of the power held by these Big Tech firms includes both the strategic and responsive growth of relationships involving technology and political-economics. This growth is aimed at connecting a range of stakeholders, including governments, businesses, users, and academia, with the infrastructures and platforms created by Big Tech.

Structural Implications of Big Tech for Competition

Scholars such as have highlighted the significance of the network effect as a key structural implication of Big Tech for competition policy. These companies have established themselves as intermediaries in building multi-sided market platforms. Network effects result from how the number of users in a network (e.g., social media platforms, search engines) increases the usefulness of the network to its users, thereby raising its attractiveness for new users. Consequently, as the noted in 2020, network effects lead to a self-reinforcing cycle in which users migrate to the fastest-growing network. With this network effect, Big Tech companies are amassing a startling amount of data, providing them with an enormous competitive advantage, creating barriers to rivals entering or thriving in relevant markets, and allowing the incumbent digital platform providers to expand into adjacent markets.

The second structural effect is connected to but distinct from the first: investments made by Big Tech firms mean they can scale up with lower-than-usual costs. As the UK's 2019  put it, ‘Both the scale and the data that the platforms possess on consumers make it hard for other players, including publishers, to compete.’ Economies of scale have provided significant benefits for Big Tech firms as they have grown quickly to dominate their markets. This is clearly becoming a cause for concern amongst policymakers worldwide (as seen in, e.g., , , , OECD 2022). The main negative effect of such economies of scale is the loss of market contestability: there are significant barriers to entry into digital markets because Big Tech incumbents benefit from first-mover technology advantages; there are also significant disparities in market information; and then there are disparities in the capacity to adjust prices because incumbents benefit from greater information (e.g., data collection) and higher processing capacity (e.g., computing infrastructure). 

The third structural issue identified in our paper is the gatekeeping role of these Big Tech companies in our societies and economies. Policymakers have thus noted that a few digital gatekeepers hold the keys to the crucial digital infrastructure that impacts our everyday lives—whether it's staying in touch with friends, finding job opportunities, or accessing information. Gatekeepers can control access to the users and their data, which can hold significant value for other firms wishing to connect with consumers. The fact that this vital digital infrastructure, including personal data, is largely provided by Big Tech, makes it tough for startups and competitors to enter the market.

Techno-economic implications of Big Tech for competition

The first techno-economic issue we identify is the capacity of Big Tech to enter adjacent markets through data collection. As the  pointed out in 2019, ‘The extensive amount of data available to Google and Facebook provide these platforms with a competitive advantage and assist with entry into related markets.’ Data-driven business models enable Big Tech to enter adjacent markets through the modular extension of technical standards and terms and conditions (e.g., APIs, SDKs, plugins).

The second techno-economic issue concerns the spread of market power through the creation of digital ecosystems as ‘walled gardens.’ An ecosystem is more than a platform: it is the configuration of technical devices, applications and software, platforms, users and developers, payment systems, terms and conditions, and other legal rights and claims and standards (see: Autoriteit Consument & Markt, 2019). As explained by the , through this ecosystem, end-users get locked in, reducing the opportunity for competition, even when products and services (e.g., Gmail, Facebook) are notionally ‘free.’

The third techno-economic issue follows the second: Big Tech reinforces its market power by creating ‘enclaves’ in which they govern economic activities. These enclaves are distinct from markets; they sit inside wider markets, , but gatekeepers can also establish the internal ‘rules of the game’ and control market information. Policymakers have highlighted various relevant business strategies and practices—including the setting of defaults, cross-selling, and self-preferencing—that reduce competition within these techno-economic enclaves.

Challenges of digital personal data for competition and competition policy

The mass collection and use of personal data by Big Tech therefore has structural and techno-economic implications for competition policy—implications with which policymakers around the world are now grappling.

A key consideration in these policy materials is the techno-economic dimension of data-driven leverage. Policymakers repeatedly observe that Big Tech enjoys a competitive edge, primarily because of its vast personal data reserves and its ability to limit other companies' access to this valuable information. Although any digital firm can gather personal data, having substantial data holdings boosts innovation potential and offers a notable business advantage. This concern has been underscored by the.

Already concentrated digital markets are likely to concentrate further without concerted action to change competition policy. Our paper demonstrates the growing awareness among policymakers of the important effects of Big Tech and personal data collection on competition and market power. Of course, there's also a looming concern that the winner-takes-all dynamics fuelled by data control could influence the future development of important technologies like artificial intelligence, which significantly depend on large training datasets.

'Damola Adediji is a Visiting Researcher with IP Osgoode and a Doctoral Candidate with the Centre for Law, Technology & Society at the University of Ottawa.

The post Identifying the implications of Big Tech and digital personal data for competition policy appeared first on IPOsgoode.

Photo by Shahadat Rahman ()

Tiffany Wang is anÌęIPilogueÌęWriter,ÌęIntellectual Property Journal Editor, and a 2L JD Candidate at Osgoode Hall Law School.Ìę

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Through accelerating digitalisation, the pandemic has vaulted taxation to the forefront of the global political and economic system. The Organisation for Economic Co-operation and Development (“OECD”) commenced public consultations in January to . The growth of multinational enterprises (“MNEs”), particularly digital corporations, enervates the current global corporate tax system, and the OECD opines that a (“GDP”). Two proposals, Pillar One and Pillar Two, seek to address this quagmire.

jurisdiction. (currently agreed at ). , . The endorsed package has .

Digitalisation pares back the integrity of tax structures. Tax avoidance runs rampant, and the two proposals attempt to outduel digital corporations’ approach of poaching taxes.

Presdent Biden’s leadership on pushing the two pillars through Congress and the G20 demonstrates a recycling of traditional taxation in dealing with Big Tech MNEs. Google, Amazon, Facebook, and Apple (“GAFA”) awaits trial as Washington envisions .

The lore of the minimum tax plan is “.” The global taxation reset presses for a pro rata basis of digital taxation to avoid base erosion. If Congress favors this plan, digital MNEs may fall prey to a .

Ambitious and focused, the OECD will ensure that all major players have some skin in the game of international taxation and digitalisation.

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Nikita Munjal is the IPilogue Content Manager, an IP Innovation Clinic Fellow, and a third-year JD/MBA Candidate at Osgoode Hall Law School.

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In January 2021, the then-acting president of the United States, Donald Trump, from Facebook for statements he had made in the immediate aftermath of the violent insurrection which took place at Capitol Hill. Trump’s comments were seemingly the last straw for the social media giant who had repeatedly cited its commitment to upholding free speech in defending its stance on Trump’s use of inflammatory language on the platform.

However, Facebook’s decision in January was not final. When accounts are banned or posts are removed from Facebook or its subsidiary, Instagram, users can appeal the decision to the quasi-judicial body, Alternatively, Facebook can refer cases to FOB to determine whether its decision had been fair, as was the case here.

FOB’s Decision

In early May 2021, the that Facebook was justified in suspending Trump’s accounts. However, they stated that it was “not appropriate” for Facebook to impose an indefinite suspension, which contravened Facebook’s standard operating procedure. Facebook’s penalties usually pertain “removing the violating content, imposing a time-bound period of suspension, or permanently disabling the page and account” (at p.1). FOB gave Facebook six months to reexamine its arbitrary penalty and give an appropriate penalty based on the gravity of the violation and the prospects of future harm.

Facebook’s Response

In June 2021, approximately a month after FOB’s decision and within the six-month time period, Facebook : Trump’s suspension from Facebook and Instagram will last for two years, effective from the initial suspension date. However, at the end of the two-year period, Facebook will reassess whether the risk to public safety has receded.

Unsurprisingly, this set of decisions has garnered mixed reactions. Some writers have stated that this is a victory for Trump, who could return to the social media platform in time for a potential 2024 presidential run. Others have argued that this is a victory for Facebook since it could decide whether to continue to the suspension or allow Trump back on its platforms Ìębased on the political landscape at the time while hiding their rationale behind the risk posed to public safety.

Broader Implications for Free Speech on Social Media

Trump’s social media presence during his presidency exacerbated the discourse around regulation and moderation of content posted on social media. Specifically, questions have arisen as to whether corporations or governments are better positioned to regulate content on social media.

Some industry members including FOB member and former prime minister of Denmark, Helle Thorning-Schmidt, are calling for . These proponents cite its funding, autonomy from Facebook, and diverse membership as reasons for its potential success in regulating the space. However, not everyone agrees with that position. For one, FOB seems powerless in for its role leading up to the insurrection. This is not to suggest that Facebook is the only social media platform grappling with finding an appropriate balance between promoting free speech and preventing harm; however, its role cannot be understated.

Critics argue that FOB’s decisions by focusing too much on corporate oversight. Instead, the focus should be placed on passing legislation that curtails Big Tech’s business models and protects users from their voraciousness.

Currently, the Canadian federal government is preparing to unveil legislation regulating social media content. The legislation to be modeled after Germany’s NetzDG law, which requires social media platforms to remove illegal content under tight deadlines or face severe fines.

warn that following Germany’s precedent could be problematic for two reasons. First, it won’t effectively deal with content that is “lawful but awful”, that is, content that is legal but is known to create real-world harm. Given the Charter of Rights and Freedoms’ broad protections for freedom of expression in Canada, it will be difficult for the government to curb the expression of harmful ideas in public spaces. Second, the legislation could set a bad example for countries that criminalize forms of expression protected under international human rights law. Laws that impose severe penalties on social media companies for failing to remove illegal content under a nation’s laws could increase the criminalization of political dissenters and minority communities. To address these concerns, scholars suggest Canada adopt a multilateral approach by working with other rights-respecting democracies to prevent the internet from “splintering into a series of national networks.”

Ultimately, until the federal government unveils the legislation and holds consultations, it is difficult to predict its effectiveness. However, online content requires regulation, whether that be from corporate entities, governments, or something in between.

The post Facebook Bans Donald Trump for Two Years, but the Discussion on Regulating Free Speech on the Internet is Just Beginning appeared first on IPOsgoode.

The Nature of the Lawsuit

There exists little doubt about the extent of Google’s current reach in the digital markets. It currently stands as one of the wealthiest companies in the world, with a market value of $1 trillion. It brought in $162 billion in revenue last year, and has accounted for just under . The Department of Justice’s lawsuit against Google is one that is expected to potentially drag on for years to come, and “” with regards to remedies, according to associate deputy attorney general, Ryan Shores. Specifically, the government seems to be pushing for “”, which could involve the selling and/or cessation of portions of the company’s business.

The suit is the product of about that U.S. officials began last summer into Google’s advertising practices. The inquiry then rapidly expanded to encompass search monopoly allegations after the emergence of several complaints from rival tech and media companies. In response, the Justice Department has decided to once again enforce the , an antitrust law regulating enterprise competition that the government has previously used on a number of occasions in the past to combat notable companies in the , , and industries.

Anticompetitive Conduct and the Potential Harms

The Justice Department claims that Google locks up digital channels of distribution by implementing a string of with manufacturers and distributors such as Apple, LG, Motorola, Samsung, AT&T, T-Mobile, Verizon, Mozilla, Opera, and UCWeb. These contracts include anti-forking agreements that constrain manufacturers and distributors to remain in relation with Google, pre-installation agreements for premium placement of Google products, and revenue-sharing agreements in exchange for preset, default search engine privileges. For instance, the company has to be the default search engine on Apple’s products. The two tech giants are indeed - last year, about 50% of Google’s search traffic came from Apple devices, while Google annually pays Apple billions of dollars for the privilege of exclusivity, its payments making up approximately 15 to 20% of all Apple’s profits.

There are a number of reasons why antitrust laws are in place, and why exclusionary and anticompetitive conduct on the part of big tech companies is discouraged. It can harm competition and stunt technological innovation by denying established rivals and emerging startup companies the necessary channels and recognition to compete effectively in the market. The government also alleges that because it diminishes choice and lowers the quality of search services, especially with regards to consumer privacy and data protection. Moreover, the company’s monopoly over the online advertising market allows them to charge higher rates than they would be able to in a competitive market, thereby reducing the quality of the services that Google must provide to .

In Google’s Defense


Shortly after the announcement of the U.S. government’s lawsuit, Google’s chief legal officer Kent Walker published a response on the company’s website, calling the claim “”. On the company’s behalf, he insists that consumers “use Google because they choose to, not because they’re forced to, or because they can’t find alternatives”, and goes on to demonstrate the ease with which users can set up their search engine of choice or alter their default settings. Walker argues that the suit would artificially bolster lower-quality search alternatives, hike up phone prices, and inconvenience users in getting to the search services they want to use. Furthermore, while the government seems to think that Google competes exclusively with other general search engines, the company upholds that in practice, people find information through a variety of mediums, thereby expanding the competitive landscape to include such rival companies as Twitter, Instagram, Pinterest, and Amazon.

Other critics have questioned whether the timing of the suit might be politically-motivated, seeing as how the federal government and Attorney General William P. Barr allegedly (against the recommendation of some government lawyers) by the end of October, just weeks ahead of the 2020 presidential election. It might also be noteworthy that all eleven of the state attorneys general that have currently signed on to support the lawsuit , and that President Trump has previously criticized tech companies like Google and other widespread media platforms for politically leaning towards the left. However, both conservative and liberal leaders alike have denounced the lack of regulation over big tech in the past, and concerns that arise in the meantime regarding any political undertones within the lawsuit remain as speculation.

“Whether led by Donald Trump or Joe Biden, the next administration should think systematically and comprehensively about the power of tech companies and what needs to be done about it.” - Bill Baer, Ìę

Conclusion

Judging from the parallels between the present case and the Justice Department’s , it is clear that this development is only the start of something much bigger. Colorado, Iowa, Nebraska, and New 91ŃÇÉ« state governments have asserted that they are still investigating Google’s business practices, and may sign on with the other state attorneys general in supporting the case at a later date. Regardless of what the court decides, the stakes remain considerable - either a potential restructuring of one of the world’s biggest digital empires, or a huge hampering of the government’s efforts in enforcing antitrust laws onto the big tech companies that it's been battling for years.

Emily Xiang is a first year JD candidate at Osgoode Hall Law School. She is an IPilogue editor and a 1L executive for the Intellectual Property Society of Osgoode.

The post Grappling with Google: Market Monopoly, Big Tech Exclusivity, and Political Plays?? appeared first on IPOsgoode.

Apple’s new operating software will require apps to get opt-in permission from users to collect their advertising identifier, a number that allows advertisers to send targeted ads, instead of an opt-out system. It has been argued that under Apple’s new privacy configuration, few users will agree to be tracked, which makes it harder for advertising companies to sell personalized ads. On the other hand, Apple can hold itself to a to iOS users without asking them for prior consent and potentially boost its profits.

Moreover, the United States Department of Justice against Google on October 20, 2020, for antitrust violations. Google is said to be facing the most significant in a generation since the unprecedented case against commenced in 1998. In this particular context, antitrust violations refer to the , which inhibits healthy and fair competition, leaving consumers vulnerable to predatory business practices in various ways.

Currently, Google controls about A recent report from a House Judiciary Subcommittee concluded that Google has . One of the reasons behind the suit was that Google is paying phone manufacturers to ensure Google is the on browsers. Google’s search application is preloaded and cannot be deleted on mobile phones with systems. Responding to exclusionary practices and market dominance, “
People use Google because they choose to ­­— not because they’re forced to or because they can’t find alternatives.”

This pre-election lawsuit against Google is said to be on tech giants for antitrust issues. In Canada, there have not been any major antitrust investigations against tech companies so far. However, that it is only a matter of time before Canada joins the US and the EU in antitrust investigations. For instance, recently, Canadian publishers complained about big tech giants such as Google and Facebook which threatens Canada's publishing market's survival. Publishers urged Ottawa to force the tech companies to urgently. Canadian Heritage Minister signalled his intent to focus on this issue and address the imbalance between the Canadian news organizations and tech giants.

Though Canadian regulators have generally been more moderate than their American or European counterparts, the Canadian Competition Bureau is now tech giants for anti-competitive behaviour. The Canadian approach to competition violations is providing s rather than taking the companies to court. However, this approach has not always worked so well in terms of .

Moreover, some people claim that big tech should not be disturbed for all the good they provide for society. Even in the 90s and 00s, challenging Microsoft for violating antitrust laws was decision. Microsoft was a well-liked company, and Bill Gates was widely held as a “visionary genius,” and it was argued that enforcing the antitrust laws against Microsoft would . However, innovation still surged in the American technology markets even after the action against Microsoft. Accordingly, demanding fairer rules and compliance surrounding competition from tech-giants should be a priority for Canadians.

Written by Elif Babaoglu. Elif is a contributing IPilogue editor and an avid privacy and tech-law enthusiast with a particular focus on artificial intelligence.

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