The Corner Newsletter: October 20, 2022
Welcome to The Corner. In this issue, we take a look at how President Biden’s executive order on personal data transfers from Europe is unlikely to placate privacy advocates on either side of the Atlantic and may raise Constitutional questions.
U.S. Order on Personal Data Transfers From Europe Doesn’t Go Far Enough
Luke Goldstein
Last week, President Biden signed an executive order formalizing a new agreement with the European Union to secure the transfer of personal data across the Atlantic. The general framework of the agreement is mainly targeted at synchronizing American security law with European privacy laws.
It's also the first step toward letting American companies resume data transfers collected on European citizens into the U.S. while abiding by Europe's privacy rights. If the agreement passes Europe’s High Court, the U.S. will set up an unprecedented legal apparatus: special courts hosted and funded by the U.S. government that preside over rights granted to foreigners that U.S. citizens still don’t have.
The saga began almost a decade ago when Edward Snowden's leaks revealed that the National Security Agency had been accessing data from U.S. tech firms on European citizens without their knowledge. A slew of lawsuits led by Austrian privacy advocate Max Schrems argued that this arrangement between the tech firms and U.S. security agencies violated Europe's privacy protections under the U.N.'s Charter of Human Rights, which guarantees that citizens have their data processed fairly, with their consent, and for specified purposes.
In 2015, Europe's High Court struck down the 15-year-old Safe Harbor agreement for data transfers and then in 2020 axed the Privacy Shield because both did not adequately protect citizens' privacy rights. The rulings were seen as victories by privacy advocates. Tech companies scrambled to put together a web of standard contractual clause agreements so that they could continue operating in Europe, but the contracts rested on shaky grounds.
For the last two years, American tech companies have been exchanging European data without any official comprehensive agreement in place, and many tech corporations have complained about the uncertainty. Earlier this year, Meta threatened to stop operating Facebook in Europe unless the EU could strike a more formal agreement with the U.S. on data transfers.
In response to Biden’s executive order, tech companies along with other firms not typically associated with data processing such as General Motors have applauded the framework as a step toward returning to business as usual. But privacy advocates say the order doesn't go nearly far enough to ensure that data protections for European citizens are met.
The executive order sets up an entirely new legal apparatus to address complaints from European citizens who believe their privacy rights have been violated. The legal structure is similar to the quasi-judicial panels set up under the World Trade Organization to handle foreign dispute settlements. In addition, the agreement establishes a Data Protection Review Court within the Department of Justice to review complaints about American security agencies' use of European personal data. The order also sets certain criteria for these reviews. U.S. agencies will have to limit their data collection within a scope of defined national security purposes and only gather personal information "in a necessary and proportionate manner. "
European privacy activists are skeptical the order will accomplish its intended goals or even pass muster with European courts. Schrems has raised doubts that the data collection limitations outlined in the executive order will be effective. "The continuation of bulk collection is allowed as long as it's for a transnational criminal threat, a vague enough definition that it won't change the status quo much," he said at an online press conference held last week by the Transatlantic Consumer Dialogue. Schrems added that the order is unlikely to hold up in European court owing to the varying definitions under U.S. and European law of "proportionate" data collection on individuals.
At the very least, the order does acknowledge that European citizens possess privacy rights that Americans don't have and sets up a redress procedure. But as Calli Schroeder, global privacy counsel at the Washington, D.C.-based Electronic Privacy Information Center, sees it, the agreement's attempts to "equalize" the playing field between U.S. and European citizens could be worse for Europeans.
"Equalizing rights between U.S. and non-U.S. persons only goes so far because if U.S. citizens don't have the same privacy rights as Europeans than equalizing will only lower the standards for Europeans under review in U.S. courts," said Schroeder at the Transatlantic Consumer Dialogue press conference. " If anything it should be a prompt to raise the privacy rights of U.S. citizens."
Open Markets Hosts Brussels Conference on the Cross-Border Fight Against Monopoly Power
The Open Markets Institute last week hosted a conference in Brussels, titled “How Monopoly Threatens Democracy and Security: The Next Stage of the Fight in Europe.” European civil society groups SOMO, LobbyControl, and The Balanced Economy Project co-hosted the event.
The event included keynotes by MEP Stephanie Yon-Courtin of France and MEP Paul Tang of the Netherlands, as well as keynotes by Christy Hoffman, the secretary general of UNI Global Union, and Max Schrems, the pioneering privacy activist.
The event marked the first public discussion in Brussels of the political and economic threats posed by the extreme concentration of industrial capacity in Taiwan and China; the first in-depth public discussion of the European Commission’s failure to use all of its antimonopoly authority to address today's most pressing threats posed by concentration; the first public discussion in Brussels about the role played by the consumer welfare philosophy; and the first speech making clear that Europe’s workers believe that the concentrated power and control of Big Tech corporations poses threats to democracy and free speech.
MEP Tang’s announcement of a major effort to rein in pro-monopoly astroturf groups supported by Big Tech was covered by Tang by Politico.
📝 WHAT WE'VE BEEN UP TO:
Barry Lynn spoke at a conference, “Competition Law in the Digital Era: Adapting to the New Environment,” held in Brussels on October 18. Speaking about the multiple crises confronting Europe and the United States, Lynn called for more aggressive and creative use of competition law and policy to help meet the challenges.
Barry Lynn spoke at the “Competition, Digital Regulation, & Society” conference, hosted by the European Consumer Organization (BEUC) in Brussels, on October 19. Lynn spoke about how to develop a strategy and narrative for the next era of antimonopoly organizing in Europe, the United States, and around the world.
Bloomberg earlier this week quoted OMI’s food systems program manager Claire Kelloway on the proposed merger of grocery giants Kroger and Albertsons: “When these companies say they’ll find efficiencies to lower prices, they really mean that they’ll close stores, lay off workers, and squeeze suppliers to pad pockets for financiers.”
Business Insider cited an op-ed in Time by Claire Kelloway published earlier this year on the role consolidation played in rising food prices in a story about the Albertsons-Kroger merger.
OMI’s amicus brief to the Supreme Court in support of Genius in Genius v Google was mentioned by Puck in an article on upcoming Supreme Court cases involving Google.
Open Markets signed a letter to congressional leaders supporting Gigi Sohn’s nomination to the Federal Communications Commission. The appointment of Sohn, former head of public interest group Public Knowledge, would give Democrats a majority on the commission.
🔊 ANTI-MONOPOLY RISING:
European Union lawmakers have filed complaints against eight companies including Amazon, Meta, and Google for deceptive lobbying through small front organizations. "This is foul play," said Tang, a Dutch MEP. "It violates the entirety of transparency on lobbying; you need to identify yourself, we need to know to know as MEPs or as other officials in the European Union who we deal with." (Politico)
The Justice Department announced the resignation of seven directors from corporate board positions in response to concerns that their roles violated the Clayton Act’s prohibition on interlocking directorates. Section 8 of the Clayton Act prohibits directors and officers from serving simultaneously on the boards of competitors, subject to limited exceptions. Over the last several months, the antitrust division of the Justice Department said it would reinvigorate Section 8 enforcement. (DOJ)
India’s Supreme Court has rejected Meta’s plea to stop a probe by the Competition Commission of India (CCI) into WhatsApp over its updated privacy policy, which would allow the messaging app to share more information with parent company Meta. CCI says WhatsApp’s ‘take it or leave it’ policy hampers the consumer’s right to data privacy and is exploitative in nature, given the large user base the platform has amassed in India. (Inc42)
Competition watchdogs in Spain announced a new antitrust investigation into Booking.com, a worldwide online travel booking platform. The National Commission on Markets and Competition (CNMC) said Monday that it would examine whether Booking.com imposed unfair trading terms on Spanish hotels and whether its policies may have had "exclusionary effects" on other online travel agencies. (Politico)
📈 VITAL STAT:
$812 billion
The estimated combined annual revenues of a supermarket empire resulting from a Kroger-Albertsons merger, which will face antitrust scrutiny from federal agencies. Kroger and Albertsons, which both operate stores in southern California, Texas, and Washington, said they expect to sell overlapping stores to help win regulatory approval. (Wall Street Journal)
📚 WHAT WE'RE READING:
“Amazon’s Secret Brands and the Power of Big Tech.” (Christy Gren, Industry Leaders Magazine) The author explores Amazon’s unethical practice of copying a competitor's product and selling it for a cheaper price on its giant marketplace, made even more nefarious by its ability to spy on the retailer’s success based on the data it harvests from its own platform.
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.