Randy Picker (HT: Randy) has posted an interesting new paper to SSRN entitled “Competition and Privacy in Web 2.0 and the Cloud“. It is an insightful look at the how privacy rules imposed on Web intermediaries might raise competition concerns. Consider, for example, the relationship between privacy rules and vertical integration that Picker highlights as a potential unintended consequence of privacy rules:
As most disclosure limits don’t prevent disclosure within a particular firm but only bar disclosure across firm boundaries, a firm will have an artificial incentive to expand the size and scope of the firm so as to use the information fully. Vertical integration renders the disclosure limit ineffective. We might see mergers that would otherwise be unattractive as a way to end-run the
across-firm disclosure limits.
A related issue that is outside the scope of Picker’s short essay, but will likely remain a hot-button issue in the years to come, is the question of whether antitrust law should incorporate privacy concerns into its competitive effects analysis, and if so, how? (See, e.g. the various positions taken by Commissioners in approving the recent Google/Doubleclick matter at the FTC)
