Welcome to The Corner. In this issue, we discuss the implications of a Belgian regulator’s ruling on ad consent pop-ups, our recent three-day conference dismantling myths about anti-monopoly reform, and the risks of rising concentration in the banking sector.

How a Small Regulator in Europe Could Upend the U.S. Digital Ad Market

Karina Montoya

A recent ruling by the Belgian Data Protection Authority (DPA) may end up having powerful effects in the United States as talks to ban surveillance advertising and protect consumers’ privacy intensify. The decision centered on those "Accept All Cookies" pop-up windows that now commonly greet visitors to websites.

The ad-tech industry has tried to use these pop-ups as a means of complying with the European Union’s General Data Protection Regulation (GDPR), which went into effect in 2016. The Belgian DPA found that the pop-ups violated the GDPR’s requirement that personal data about any person should not be used without first acquiring the individual’s consent in a clear and transparent way. Moreover, the Belgian DPA found that ad-tech platforms, publishers, and advertisers violated the GDPR by failing to keep private the personal data they collect from cookies and use for targeting digital ads.

As a corrective measure, the DPA ordered all such data be deleted immediately. It also gave a marching order to the European arm of the Interactive Advertising Bureau (IAB Europe), which is the largest trade association of digital advertisers that designed the protocols for these pop-ups under a so-called Transparency and Consent Framework (TCF). The DPA gave IAB Europe six months to come with a new framework under which the use of targeted ads would not violate the GDPR’s privacy safeguards.

That won’t be easy. One of the key points of the ruling is that the TCF makes users individually identifiable through a combination of data strings and cookies. Although the TCF does not carry personal data, after users select their data-sharing preferences in the pop-ups, the retrieval of cookies installed in a user’s browser allows ad-tech platforms to snatch personal data. This can range from IP addresses and religious beliefs to GPS coordinates and even health conditions.

The ruling threatens the foundations of surveillance advertising. This system relies on ad sellers and buyers exchanging terabytes of personal data about each of us on ad exchanges — the largest one being controlled by Google. This data packaging is not secure and leaks out in ways that clearly violate the privacy protections of the GDPR. When users click on “Accept all Cookies,” they have no way of knowing that their data will be processed by thousands of companies downstream.

Johnny Ryan, a senior fellow at both the Irish Council for Civil Liberties (ICCL) and at the Open Markets Institute, says the Belgian DPA ruling has implications far beyond Europe. In the U.S., IAB has developed the same pop-up system in response to the California Consumer Privacy Act.

“U.S. lawmakers looked at the GDPR as a failure because of these nuisance pop-ups,” says Ryan, who was a claimant in the case brought before the Belgian DPA. “But the pop-ups were merely the tracking industry’s cynical attempt to undermine the GDPR. It looked like a failure but was not. In fact, the GDPR is what has now protected people from this new consent spam. Lawmakers should consider how a similar law could now protect the U.S. citizens against the consent spam that is starting to spread in their country.”

IAB Europe has announced it will appeal the Belgian DPA’s decision. It also put out a statement denying that the TCF is illegal and advising that data collected through this system doesn’t have to be deleted. In response to this, the ICCL and the Electronic Privacy Information Center have sent a joint letter to several global advertisers calling on them to delete the data collected through the TCF in Europe.

Antitrust Champions Endorse Stricter Enforcement to Dismantle Monopoly Power

More than a dozen competition policy experts, including Senator Amy Klobuchar, Assistant Attorney General for Antitrust Jonathan Kanter, and Special Assistant to the President Tim Wu, took part last week in the Open Markets Institute’s conference “Busting the Big Myths on Anti-Monopoly Reform .” The panelists outlined the steps deemed necessary to ensure greater competition in the U.S. marketplace and reassert remedies to limit monopolies.

The three hourlong midday conversations focused on three aspects of anti-monopoly reform:

D ay 1: Sen. Klobuchar (D-Minn.) and retired four-star Gen. Wesley Clark, now a security consultant, led a conversation about anti-monopoly and national security. They agreed that concentrated power in many sectors, from manufacturing to food supply chains, threatens the economy and our democracy. “The survival of universal rights,” said Rose Jackson, of the Atlantic Council’s Democracy and Tech Initiative, “depends on us getting governance of technology right.”
D ay 2: Presidential adviser Wu kicked off a discussion about anti-monopoly and innovation. He said recent Federal Trade Commission (FTC) efforts to end the “green-light merger era,” among other policies, will limit corporate power and spark more creativity and greater prospects for smaller competitors and startups.
D ay 3: AAG Kanter introduced ideas about anti-monopoly and consumers. He said keener enforcement pushes monopolists to improve their products rather than pulling them out of the market, which benefits buyers and workers alike. Economist Rakeen Mabud of the Groundwork Collaborative decried just-in-time supply chains that erode worker pay, safety conditions, and benefits — signaling the need for stronger policies.

The conference was covered by Bloomberg, Politico, and Common Dreams, among other outlets.

Open Markets Submits Comment to the DOJ to Invigorate Bank Merger Enforcement

Open Markets last week submitted a comment to the Justice Department (DOJ), urging the agency to block more bank mergers in response to its request for comments on bank merger policies in December 2021.

In our comment, Open Markets details how rising concentration of the American banking sector has led to increases in consumer prices and decreases in worker wages and leaves communities without access to essential banking services. We urged the department to enact bright-line rules governing bank mergers.

Read the full comment here.

🔊 ANTI-MONOPOLY RISING:

The DOJ’s Antitrust Division and the FBI announced last week a joint initiative aimed at finding and prosecuting companies that engage in collusive conduct by exploiting supply chain disruptions. The division is also investigating global supply chain collusion, working and sharing intelligence with the Australian Competition and Consumer Commission, the Canadian Competition Bureau, the New Zealand Commerce Commission, and the U.K. Competition and Markets Authority. (DOJ)
Last week, aerospace and defense company Lockheed Martin announced it would end its $4.4 million attempt to acquire Aerojet Holdings, a manufacturer of propulsion systems for defense applications. The FTC, in a 4-0 vote among commissioners, sued to block the vertical merger on grounds that it would reduce competition in the market for defense contracting. Aerojet also supplies propulsion systems for Lockheed rivals Boeing Company and Raytheon, and the deal would give Lockheed the ability to limit access to technology for these companies. (Bloomberg)
The FTC announced to oil and gas company EP Energy last week that it would sue to block their $1.5 billion takeover by private equity firm EnCap Investments LP. The FTC noted that the merger would eliminate competition between sellers of oil to Salt Lake City refiners and allow EnCap to become too much of a dominant player in the Uinta Basin in Utah because it owns XCL Resources, another oil producer in Utah. Local refiners would pay more for oil as a result of the merger, according to the FTC. (Reuters)

📝 WHAT WE'VE BEEN UP TO:

Claire Kelloway and Barry Lynn were featured as top speakers in a new series by NPR’s “On Point” show looking at monopolies in America.
Listen to Kelloway’s episode about consolidation of the beef industry here.
- “Corporate power in the terms of economic power and the size that some of these corporations have accommodated to, also translates into political power. And we're seeing right now just how challenging it is to regulate what is very clearly an issue with skyrocketing prices, with all the disruption we've seen, with farmers seeing such persistent low prices. The evidence is clear.”
And listen to Lynn’s episode about antitrust law here.
- “If we are going to have to deal with these concentrations of power, if we want to save our democracy, if we want to save individual liberty, if we want to save our communities, if we want to deal with climate change, then we have to break the power that has been concentrated in today's corporations.”
Open Markets applauded in a statement Thursday a joint federal-state lawsuit to block UnitedHealth Group’s $13 billion merger with Change Healthcare. “This case represents an important strike against corporate consolidation and a step forward in the ongoing federal effort to resurrect the strong anti-merger law that Congress enacted.”
Barry Lynn argued that stronger antitrust enforcement could help assuage inflation in a story written by The Associated Press. The story ran in ABC News, US News, MarketWatch, and other outlets. “The fact that the Biden administration is focused on corporate profits and structure could ultimately limit how much companies can charge and that could deter some inflation,” Lynn said.
Barry Lynn was quoted in Common Dreams and LA Progressive Newsletter discussing how monopolies disempower workers. “’Wages across America today are 20 percent or more lower, relative to the economy as a whole, than a generation ago,” Lynn said, adding that “Monopolists have exploited their power to drive these wages down.”
Open Markets’ concentration data continued to receive coverage, including in Time m agazine. “Each year since 1980, an average of almost 17,000 cattle ranchers have gone out of business, according to a 2019 report from the Open Markets Institute, an anti-monopoly think-tank.”
Johnny Ryan continued receiving coverage, including in Silicon Republic, pushing for digital advertisers to delete all personal data collected using consent buttons. From Asharq Al-Awsat newspaper: “’The problem is the system throws personal data around to a large numbers of companies,’ says Johnny Ryan, a director with the Irish Council for Civil Liberties who co-filed the original complaint against the system.”

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📈 VITAL STAT:

27%

The cut Apple proposes to take on every dollar of purchases people make on Dutch dating apps, after the Authority for Consumers and Markets, the Dutch regulator, prohibited Apple from requiring dating apps to use only its payment system. (The New York Times)

📚 WHAT WE'RE READING:

“Making the Potential Competition Doctrine Great Again” (Mark Glick & Darren Bush, Competition Policy International): The authors describe how revitalizing the potential competition doctrine would assist with creating a significantly more robust merger enforcement environment — particularly as it pertains to nascent competitors.

NIKKI USHER'S

NEW 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.

“We need to radically rethink the core functions of journalism, leverage expertise, and consider how to take the best of what the newspaper ethos of journalism can offer to places that have lost geographically specific news, “ says Usher, an associate professor at the University of Illinois-Champaign. “The news that powers democracy can be more inclusive.”

Usher is also the author of Making News at The New York Times (2014) and Interactive Journalism: Hackers, Data, and Code (2016).

News for the Rich, White, and Blue, published by Columbia University Press, is available as a hardback, paperback and e-book. You can order your copy here.

🔎 TIPS? COMMENTS? SUGGESTIONS?

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