Competition and Privacy in Web 2.0 and the Cloud

Privacy and Security and Competition Policy and Antitrust

Article Snapshot


Randal Picker


Northwestern University Law Review Vol. 103 p. 1, 2008


This paper looks at how privacy affects competition.

Policy Relevance

If only one firm has access to information, it has an advantage over its rivals. Privacy policy, which can restrict transfers of information between firms, can affect competition.

Main Points

  • People are living more of their lives online, and more computer services like storage are based online instead of in the personal computer. As we make choices online, data is generated.
  • Online services can use that data. Whether rival services can also access the data affects competition. A seller with a good reputation on eBay cannot move it to another auction platform, restricting competition.
  • Google presently has an advantage in using information to which rivals have no access, and which is not regulated. Banks, cable companies, and phone companies’ uses of data about consumers are regulated.
  • As we continue to erect legal barriers to protect privacy, we should think about how those barriers affect competition. Limits on disclosure between firms can encourage mergers, for example.

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