LAW & ECONOMICS: FREE ONLINE SERVICES - PERSONAL INFORMATION - CURRENCY OR EFFICIENCY - ADVERTISEMENT

Do Internet users really pay with information about themselves?

Competition policy practitioners are becoming increasingly suspicious about free of charge Internet services, notably search engines. It is argued that, in fact, services were not for free, but that users would pay with information about themselves, by giving up privacy. This suggests an antitrust perspective in which personal information should be treated as a currency, in which the harvesting of excessive information might be abusive. This article offers a different perspective, in which free Internet services are better explained by paying advertisers. In this context, personal information functions as an efficiency rather than a currency (within limits). The distinction is important as the diverging perspectives may lead to fundamentally different assessments of relevant markets, dominance and conducts in online markets.

[1] I. Introduction 1. The notion that Internet users are paying with information about themselves in return for services such as organic search has gained traction. Most prominently, the European Commissioner, Margrethe Vestager, coined that “very few people realize that, if you tick the box, your information can be exchanged (…) you are paying a price, an extra price for the product you are purchasing.” [2] In a similar vein, Burnside notes that “[w]hat is true of ʻfree’ lunches is true also of ʻfree’ search: there has to be a catch.” [3] Individuals would not pay in cash but in information about themselves. Luchetta suggests a search engine business model in which, upstream, users would pay by information about themselves, whilst downstream search engines would sell the information on to

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  • European School of Management and Technology (ESMT)

Quotation

Lars Wiethaus, Do Internet users really pay with information about themselves?, December 2015, Concurrences Review N° 4-2015, Art. N° 75857, pp. 55-60

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