The Federal Trade Commission should take a closer look when companies with “big data” consolidate or merge, consumer groups recently urged.
In a letter to Chairwoman Edith Ramirez, several interim groups, including the Center for Digital Democracy, the U.S. Public Interest Research Group, Public Citizen and Consumer Watchdog, stated that in the “contemporary ‘Big Data’ digital marketplace … competition and consumer-protection issues are intertwined.”
“We believe the Commission should be more proactively involved with consumer information-oriented mergers and acquisitions,” the groups wrote. “There has been increasing consolidation in the data-driven consumer-marketing sector, with companies amassing vast holdings of the key element that drives much of online commerce—information on or about individuals.”
The letter highlighted the recent acquisition of data company Datalogix by the Oracle Corporation, which the Department of Justice approved in January. Oracle reports the acquisition creates “‘the world’s most valuable data cloud’ for digital marketing, enabling it to ‘reach consumers everywhere,’ including ‘online, mobile, email, display, social, In Store, TV, Radio and Direct Mail,’” by unifying “‘a consumer’s various identities across all devices, screens and channels.’”
Consumer groups argue the acquisition creates the potential for “serious privacy and digital consumer protection issues, concerning financial, racial, location, and other sensitive data, as well as the EU/U.S. Safe Harbor agreement.” The groups recommend that the FTC should have urged the DOJ to engage in extra scrutiny.
Consumer groups are also looking beyond this specific transaction, arguing that the FTC should not only launch an investigation into data-oriented mergers and acquisitions but also conduct a public workshop “to explore the new data-driven marketing landscape and its implications for 21st century competition and consumer protection.”
“In addition to data-broker concentration, there are also numerous new alliances and special relationships among companies that enable the ‘pooling’ of data used for targeting,” according to the letter. “All of these changes, reflecting the ‘always-on’ Big Data marketplace, demand a new analysis to determine how the structure of the consumer marketing industry has been transformed. Given the profound changes underway on how Americans learn about, shop, and pay for everyday products, through mediated, intelligent, and pervasive systems involving real-time analysis and implementation, the Commission’s investigation should help the public better understand the implications for their daily lives of these major marketplace developments.”
To read the letter to the FTC, click here.
Why it matters: “The American public deserves to know how the consolidation and use of their information affects their daily lives, from the prices they pay and the services they are offered to what this transaction means for their privacy,” the groups concluded. “We urge the FTC to develop a more effective approach to identifying new problems and threats to competition and consumer protection in the Big Data era.”