Market Definition and Free Online Services: The Prospect of Personal Data as Price

Posted by Social Science Research Network

Market Definition and Free Online Services: The Prospect of Personal Data as Price

By Magali Eben

The innovative new technology and business models of the new economy recurrently challenge established legal principles. In antitrust law, traditional tools of market definition, such as the price-based SSNIP test (small but significant non-transitory increase in price) cannot properly be applied as many online services are offered to a group of users for ‘free’. These issues are discussed in section I. It can be contested that a lack of monetary price truly means that a service is offered for free, as often users provide personal data when using the service. This paper puts forward the possibility of conceptualizing personal data as the price users pay for online services, for the purpose of market definition. To develop this thought experiment, the paper analyses the requirements personal data would have to meet to be considered as a price in section II. If users approach personal data as a medium of exchange, their sensitivity to increased demands of personal data could be used to measure demand-side substitutability. Section III assesses the extent to which personal data could be incorporated as the price in the SSNIP test, acknowledging both its limitations and its potential.

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