100M Users Debunked the Argument That Big Tech Uses Monopoly Power to Hurt Individual Privacy

Critics of big tech have argued for many years that these companies exploit their market power to harm consumer privacy. They say that rather than raising prices, as traditional monopolies might do, these free online services harm consumers through non-price factors, such as collecting more data than consumers would otherwise allow. Moreover, they point to this argument when calling for paternalistic privacy regulations because, in their minds, consumers can never voluntarily consent to data collection when doing business with these powerful data monopolies.

While many have soundly disproved this theory, its adherents continue to champion these ideas. For example, the House Judiciary’s blockbuster antitrust report on big tech argues that “dominant firms offer fewer privacy protections than they otherwise would.” Indeed, FTC Chair Lina Khan, who also worked on the Judiciary report, has explicitly endorsed this theory. In her first major speech on data privacy, Chair Khan noted that the FTC would be “assessing data practices through both a consumer protection and competition lens.” And echoing the idea that consumers cannot decide for themselves whether to share their personal data with big tech, she labeled the notice-and-consent model “outdated and insufficient” because “users often lack a real set of alternatives and cannot reasonably forego using these tools.”

However, the rapid consumer adoption of Meta’s Threads, a new social media platform competing with Twitter, has put new holes in this theory. After all, proponents of the argument that privacy is a nonprice factor of competition have argued that consumers only consent to data collection on large social media platforms because companies have coerced consumers by using their dominant market power. As described in the 2020 House antitrust report, these critics believe that “dominant firms offer fewer privacy protections than they otherwise would” and, as a result, “consumers are forced to either use a service with poor privacy safeguards or forgo the service altogether.”

If this theory were true, a new online service, which has no market power, would be unable to coerce consumers to adopt “poor privacy safeguards.” A competitor to an entrenched social media service like Twitter would have to offer more privacy protections to attract consumers—otherwise, consumers would simply choose not to adopt it. Yet none of that happened with the release of Threads. Instead, Meta launched the new social media service with a virtually identical privacy policy to what it uses on other services like Instagram and Facebook. Indeed, because Meta plans to integrate Threads with an interoperable protocol that connects different social networks, users will arguably have less privacy because their comments, interactions, posts, and profiles on Threads can be shared with third-party services. But instead of seeing anemic adoption, the new microblogging service reached 100 million users only five days after launch—an unprecedented record for a new app.

Defenders of the theory linking competition and privacy might argue that Threads is so much better than Twitter that consumers were willing to overlook its data handling practices. But there’s little evidence to support such a conclusion. Indeed, there have been countless headlines slamming the new social media platform, such as from Vice (“Threads is All The Worst Parts of Twitter And Instagram in One Very Bad App”), Slate (“Meta’s New Threads App is Terrible”), and The Atlantic (“Zombie Twitter Has Arrrived”). While Threads certainly shows potential, it still lacks many popular features found on other platforms like direct messaging, a feed of only the accounts users are following, the ability to search posts, and a list of trending topics.

The reality is that the majority of consumers are what privacy scholar Alan Westin labeled “privacy pragmatists”—they are willing to make tradeoffs between privacy and benefits, whether that is using a grocery store loyalty card to get benefits or allowing a company to track their online behavior to get free online services. But there is a vocal minority of “privacy fundamentalists” who privilege privacy above all else. It would be fine if they only wanted to limit what data they shared about themselves, but many also want to create laws and regulations that would limit what anyone else could share too. Indeed, this goal is exactly what FTC Chair Khan meant when she called for “substantive limits rather than just procedural protections” for data protection. In other words, instead of giving consumers a choice (“procedural protection”), she wants to take that choice away (“substantive limits”). She even boldly questioned “whether certain types of data collection and processing should be permitted in the first place.”

The antitrust concerns about privacy have been misguided from the start. Hopefully, now that 100 million users have poked holes in this theory, it can finally be put to rest.