![]() A data-centric business's success, he explains, can depend on how it adjusts to an avalanche of data and a rapid increase in users. But what those firms did offer was a new approach and a product consumers liked to use, and the data followed.Īmerican Action Forum's Will Rinehart notes that a firm's successfully "processed data," not raw data, is what gives it a competitive advantage. Consider that when ride-sharing companies burst onto the scene, they didn't have the relevant data-their taxi and limousine rivals had it. Only through innovation-the creation of products and services that efficiently and effectively harness data-does that information become valuable. Second, consumer information has little or no value on its own. First, as we discussed above, the type of data that new competitors require to enter the online market is abundant, reusable, and relatively inexpensive to obtain. Two major factors dictate against data, in and of itself, being a market entry barrier. Also, the authors explain, data's short lifecycle of relevance and its repetitive nature reduce its value as more is collected.Ī fourth argument for antitrust intervention is that large online firms' data possession constitutes a market barrier to entry. But more data doesn't provide more value at less "cost." As more data becomes available and more businesses are collecting it, data's value decreases. Collection of data, they argue, is more of an economies-of-scale effect than a network effect. should follow other countries' lead and bring these American-made innovators to heel (including at tomorrow's House Judiciary Committee hearing), we may hear phrases like "data is the new oil," "essential facility," "network effects," and "barrier to entry." The use of such catchy buzzwords should not distract anyone, however, from the reality that collection and use of consumer data does not justify demands for elevated antitrust scrutiny.īut as as two general partners at venture-capital firm Andreessen Horowitz explain in an analysis, businesses cannot count on network effects to build a "data moat" that secures a firm's survival. Photographer: Al Drago/Bloomberg © 2019 Bloomberg Finance LPįederal and state antitrust regulators and politicians are fixated on this country's most successful online businesses. House Judiciary Antitrust, Commercial and Administrative Law Subcommittee Chairman David Cicilline has said recently that concentration in the digital markets industry has resulted in anti-competitive behavior, breaches of privacy and consumers losing control of their own data. speaks during a subcommittee hearing in Washington, D.C., U.S., on Tuesday, June 11, 2019. The region is focusing on “very specific business conduct” linked to the company’s dual role as a retailer and a platform for smaller merchants, Margrethe Vestager, the EU’s antitrust commissioner, said last November.Representative Jerry Nadler, a Democrat from New York and chairman of the House Judiciary Committee. The buy box forms part of the investigation currently underway in the EU, which is also looking into whether Amazon violated antitrust rules over its use of business data from independent sellers on its marketplace to benefit its own retail arm. It also scrutinized how the Seattle-based e-commerce giant decides which merchants appear in the so-called buy box - the panel where Amazon highlights sellers of a particular product and is a key tool to drive sales. The CMA’s analysis has focused on how Amazon uses the data it collects on its platform, according to the FT. “The CMA cannot speculate as to which cases it may or may not investigate,” a spokesperson for the regulator said in an email. ![]() Read more: Amazon Hit by EU Complaint, Faces New Probe Over Sales small and medium-sized enterprises that account for more than half of everything we sell in our online store,” the company said in a statement. “We continue to work hard to deliver great value and low prices for customers and support the tens of thousands of U.K. and Apple Inc.Īmazon declined to comment on the investigation. move adds to European Union and German probes of Amazon’s business and follows multiple investigations into Google, Facebook Inc. Silicon Valley giants are the focus of a vast array of European probes into how internet giants increasingly govern the terms of what people do online, often gaining insights into user behavior that no-one else can match. While the regulator hasn’t yet announced an investigation, it may focus on whether Amazon favors merchants that use its logistics and delivery services, the report said. The Competition and Markets Authority has been analyzing Amazon’s business for months, according to the newspaper. antitrust scrutiny into how it uses data from smaller sellers on its site, the Financial Times reported, citing three people with knowledge of the matter.
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