The Corner Newsletter: April 8, 2022
Welcome to The Corner. In this issue, we examine the California attorney general’s decision on how personal data is defined and its implications for Big Tech’s surveillance advertising practices.
To read previous editions of The Corner, click here.
Big Tech Must Disclose Data Used to Profile Citizens’ Behavior, California AG Says
Karina Montoya
Last month, California Attorney General Rob Bonta issued his first opinion interpreting the definition of personal data under the California Consumer Privacy Act (CCPA). The law, in effect since January 2020, gives state residents rights over the personal data platforms hold about them, including the right to opt out of its sale and sharing, or to delete it. The opinion clarified for the first time that the profiles platforms create about individual users to tailor advertising to them should be considered personal data. The opinion applies both to data collected directly by the platforms and “inferences” based on close study of other behavioral patterns.
Bonta delivered his opinion in response to a specific inquiry by a member of the California Assembly, so the full implications are not clear. One immediate practical effect, however, is that platforms must now disclose this information to any individual California resident who asks for it.
But some data privacy experts expect Bonta’s decision may actually threaten the long-term viability of the surveillance advertising practice that underpin Google’s and Facebook’s business models. The decision, they say, opens the door to a broader discussion about an extended definition of personal data and the types of control consumers should have over it.
“Access requests are not a holy grail, but it’s a win for transparency,” Ignacio Cofone, assistant professor and Canada Research Chair in AI Law & Data Governance at McGill University, told Open Markets. There is also a “huge potential for expanding other rights” to this type of data, he added, including the right to delete profiling data or to opt out of this practice entirely.
In the meantime, Cofone suggested, data privacy activists will have more resources to expose data aggregation practices that allow for price discrimination based on predicted behavior, or to exclude users based on race, gender, or religion in ads for housing or employment opportunities.
Google, Facebook, and other platforms routinely derive inferences about a user’s behavior by aggregating seemingly innocuous data points (such as IP addresses, email, and age) harvested from consumers directly or from public sources, with data gathered through surveilling users across the web. These insights can reveal a person’s voting intentions, religious beliefs, sexual orientation, or health conditions — information that consumers never intended to provide in the first place. It is through this practice that platforms can, for example, fuel extremism and push users to join partisan political groups online, as The Markup reported.
For instance, when a person uses Google’s search engine, maps, mail, or voice assistant, the platform stores those interactions. If that same person visits a news site supported by Google ads or analytics, Google is able to collect data about that content as well. Google then aggregates all this data to help target ads to that person. Facebook does the same with data collected from WhatsApp and Instagram, and from third-party websites with embedded Facebook buttons.
Californians can already download their personal information from platforms covered by the CCPA, but until now platforms have not included the full profiles they have compiled about that individual.
Other legal experts say that Bonta’s recent decision implicitly allows platforms to continue to retain and deal in inferred data even if a consumer has requested that his or her direct personal data be deleted. The Attorney General’s Office declined to comment on this issue.
More clarity about the CCPA implementation and enforcement is yet to come. After the CCPA was amended through the California Privacy Rights Act in late 2020, the California Privacy Protection Agency was created to enforce both laws, in addition to the attorney general. The agency is expected to complete its rulemaking at the end of this year, and it will not affect the attorney general’s opinion.
Liberty From All Masters Now Available in Danish Translation
Barry Lynn traveled to Copenhagen, Denmark, for the publication of the Danish translation of Liberty from All Masters. The book was reviewed by all of Denmark’s main newspapers, including two full-page reviews — one on the cover of Denmark’s main book review newspaper section. While in Copenhagen, Lynn met with the Danish competition commissioner and with the Ministry of Culture, which helps to protect Danish news publishers from Facebook and Google. Lynn also sat for eight interviews with Danish journalists.
🔊 ANTI-MONOPOLY RISING:
The Department of Justice announced in a letter to lawmakers last week that it would support the bipartisan House and Senate antitrust bill forbidding self-preferencing by Big Tech. The American Innovation and Choice Online Act currently being debated by Congress would forbid large digital platforms from amplifying their own products and services over that of competitors. The support from the DOJ represents an affirmation that the bill can be enforced and will increase competition. (Axios, The Wall Street Journal)
Last week, Amazon workers at a warehouse in Staten Island, N.Y., voted to form the Amazon Labor Union, the first union in the company’s 27-year history. The successful vote comes after Amazon spent millions of dollars in attempts to prevent unionization efforts in the U.S. Amazon’s labor practices have been consistently under scrutiny for poor working conditions and is being investigated by the Democratic lawmakers. (NBC News)
The White House announced last week that it would invoke the Defense Production Act of 1950 to increase domestic production of critical minerals needed for electric vehicles and large capacity batteries, crucial to the administration’s efforts to increase clean energy use. The act covers minerals such as lithium, nickel, graphite, cobalt, and manganese, which the U.S. is heavily dependent on from monopolistic suppliers abroad. (Bloomberg)
A group of Senate Democrats sent a letter last week to the Federal Trade Commission asking for an investigation into Microsoft’s attempted $68.7 billion acquisition of Activision Blizzard. The letter argues that the merger could threaten worker demands for greater accountability and weaken voices attempting to address worker grievances. The letter claims that the merger could increase monopsony power and anti-competitive conduct in the labor market and asks the FTC to take this into account. (Barron’s)
📝 WHAT WE'VE BEEN UP TO:
Barry Lynn spoke at the "Competition and Regulation in Disrupted Times” conference last week in Brussels. The event was the first major trans-Atlantic gathering of public and private competition experts since the COVID-19 pandemic, and included speeches by Margrethe Vestager, Lina Khan, Thierry Breton, Jonathan Kanter, Tim Wu, Andreas Mundt, Andrea Coscelli, and Rod Sims. Johnny Ryan also spoke on a panel.
Sandeep Vaheesan testified before the Colorado General Assembly about the importance of non-compete agreements in protecting worker freedom.
Claire Kelloway’s presentation at the “Reforming America’s Retail Food Markets” conference at Yale University Law School last month was cited in an article in The Pantagraph about the consolidation of the grocery distribution industry.
Open Markets Institute was mentioned in Politico in an article about the newly unionized organizations in the Washington D.C., area. The growing number of think tanks recognizing their unions is a widespread development within the sector.
Foreign Policy quoted Barry Lynn’s 2005 book End of the Line regarding his argument that “corporations have built the most efficient system of production the world has ever seen, perfectly calibrated to a world in which nothing bad ever happens.” FP continues to mention that “The global economy, he argued presciently, was enormously vulnerable to disruptions of all sorts, from wars and terrorism to earthquakes and pandemics. In search of efficiencies, multinational companies had blithely ignored such risks for decades.”
Claire Kelloway was interviewed on WTTW News’ “Chicago Tonight” about supply chain and market power obstacles in the meatpacking industry: “Certainly the industry does face some genuine supply chain disruptions … but this is also a highly concentrated industry. If these companies were just passing on their increased costs of production we wouldn’t see their profits increase. But not only are they not just maintaining their current profits, they’re rising at record levels.”
Jody Brannon was featured on the “What Works: Future of News” podcast to talk about the dangers that the future of tech poses in further consolidating corporate power throughout all industries. Listen to the episode here.
Johnny Ryan was quoted in S&P Global about Europe’s Digital Markets Act and how critical enforcement will be to its effectiveness. “The most important part of the DMA is a provision that indicates designated gatekeeper companies would not be allowed to combine and cross-utilize user data from different parts of their business to form targeted advertisements, according to Johnny Ryan, senior fellow at the Irish Council for Civil Liberties and a senior fellow at U.S. pro-competition group Open Markets Institute.”
📈 VITAL STAT:
$3.6 Billion
The amount that JetBlue Airways has bid for Spirit Airlines, “throwing a wrench into Spirit’s plan to merge with Frontier Airlines and create a behemoth budget carrier.” (The New York Times)
📚 WHAT WE'RE READING:
“The Antitrust Case Against Gig Economy Labor Platform” (Law & Political Economy Blog, Marshall Steinbaum): The author describes how antitrust plays a fundamental role in shaping relationships between workers and corporations and how antitrust law can be used to enhance the rights of workers.
“Laboratories of Anti-Monopoly” (Washington Monthly, Rob Wolfe): The author details how the individual states can use their vast regulatory power to supplement the wave of federal and private enforcement of the antitrust laws.
Nikki Usher’s Book:
News for the Rich, White, and Blue: How Place and Power Distort American Journalism
Nikki Usher, a senior fellow at Open Markets Institute’s Center for Journalism & Liberty, has released her third book, News for the Rich, White, and Blue: How Place and Power Distort American Journalism. In her latest work, Usher offers a frank examination of the inequalities driving not just America’s journalism crisis but also certain portions of the movement to save it.
Open Markets Employment Opportunities
You can find the full job listings here.
🔎 TIPS? COMMENTS? SUGGESTIONS?
We would love to hear from you—just reply to this e-mail and drop us a line. Give us your feedback, alert us to competition policy news, or let us know your favorite story from this issue.