Edited by Björn Lundqvist and Michal S. Gal
Chapter 6: How to measure privacy-related consumer harm in merger analysis?
This chapter contributes to the current debate on how privacy concerns can and should be integrated into merger analysis. While competition authorities increasingly account for the role of personal data as a source of market power, privacy-related consumer harm still remains a blind spot in merger analysis. I therefore discuss how this analytical gap can be filled by mapping out three potential theories of privacy-related consumer harm: namely, privacy as an element of product quality, privacy as a feature of consumer choice, and privacy as non-monetary price. As the main contribution, I propose willingness-to-pay studies in the form of conjoint analysis as a methodology that enables merger analysis to quantify the non-price effects of privacy-related consumer harm in monetary terms. By discussing potential objections to this approach, I suggest that the widespread opposition to the incorporation of privacy into merger analysis is based on a ‘privacy fallacy’. This ‘privacy fallacy’ derives from the erroneous assumption that deteriorations in the level of privacy protection as the consequence of a merger automatically amount to a breach of data protection rules which should be addressed by data protection regulation, but which do not constitute an antitrust concern.
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