Do Consumers Care About Privacy? If Not, Antitrust for Privacy is a Fool’s Errand

“Big tech” companies are criticized for their size and surveillance practices. Recent antitrust filings argue big tech size begets platform surveillance and big tech surveillance begets platform size.

The social networking antitrust case brought by state attorneys general alleges that monopolistic platforms harm consumers by degrading the privacy protections they offer over time. The argument is that a platform wins users with sector-leading privacy protections and proceeds to roll those back as the platform gains market power. Since consumers do not pay a fee for social networking services, a claim that consumers are harmed by an alleged monopolistic platform must focus on the quality of its services, and according to state attorneys general, privacy is a principal feature of social network service quality.

“Historically, Personal Social Networking providers have refrained from charging a monetary price for providing Personal Social Networking to users, relying instead on monetizing user data and engagement through advertising. Personal Social Networking providers compete for users based on a variety of factors, including quality of the user experience, functionality, and privacy protections, among other factors.”

Complaint at 13.

The argument that consumers prefer greater privacy protection than big tech provides is always tricky, as every example of an alleged big tech surveillance practice existing in the market is simultaneously an example of the market tolerating that very practice. The antitrust privacy argument seeks to resolve this tension with the explanation that market power enables companies to adopt practices despite consumers’ preferences: without viable alternatives in the market for “Personal Social Networking Services,” consumers must take what they can get, and what they can get is not what they actually want.

In a world where consumers’ revealed preferences on a mass scale suggest they accept the balance of privacy protection presently on offer, how can one discern that consumers demand greater privacy protection than the market actually supplies? The state attorneys general complaint looks to a market entrant platform’s early privacy protection practices and argues those features — along with other aspects of user experience — were a platform’s initial competitive advantage. The intellectual inspiration for the state antitrust suit — Dina Srinivasan’s law journal article — looks to consumer privacy preference polling and surveys to support the claim that consumers value privacy in social networking services. Query whether either of those empirical claims is compelling or dispositive.

As Skee-Lo’s timeless song goes, “I wish I was a little bit taller, I wish I was a baller….” With respect to consumer demand, there is little doubt that ceteris paribus consumers would accept, and plausibly prefer, greater privacy protections. However, where greater privacy protections are traded off against other competing values, who knows to what extent consumers in aggregate will hold them dear.

In theory, increasing competition in the market for personal social networking services would provide an interesting experiment to test the hypothesis that consumers demand greater privacy protections than those presently on offer. However, this begs the question of how little competition in social networking there truly is. The state antitrust suit narrowly defined the relevant market as that for “Personal Social Networking Services” and excludes YouTube from that space. The word “TikTok” does not appear in the complaint; the word “Snapchat” appears once as an oblique reference. In antitrust, market definition matters. It is possible that in a competitive market for social networking services, the relative value that consumers place on privacy protection as traded off against other features is less than what legal theorists and attorneys general assume it is or ought to be.

Market failures happen. Could it be that the aggregate of individual choices with respect to the relative value placed on privacy produces an inefficient distribution of privacy for society as a whole? Maybe. Perhaps digital privacy protection is a value that society demands but just not in the market, and instead must be made manifest through extra-market solutions, such as GDPR-like comprehensive digital privacy legislation. If true, antitrust is the wrong approach on privacy. To discipline the market with non-market values would likely require a “Blue Model“-like accommodation between big tech and big reg: companies with the size to withstand the compliance costs, which, in turn, will favor consolidation.

America Deserves a Second Opinion

Dr. Fauci’s latest admission of a noble lie to the New York Times — that he has “slowly but deliberately been moving the goal posts” of his public herd immunity estimates “partly based on new science, and partly on his gut feeling that the country is finally ready to hear what he really thinks” — drew apt comparisons to the disappointing elite described in Martin Gurri’s The Revolt of the Public.

Antonio García Martínez tweeted in reaction, “I see @mgurri and the unsustainability of elite authority everywhere I look now.”

Dr. Fauci is the perfect archetype of Gurri’s Olympian technocrat, an elite man of the “center” whose mastery of esoteric knowledge has granted him the privilege of distance from the public. His foil, President Trump, is the perfect archetype of Gurri’s tribune of the deplorables, a man of the “border” whose mastery of communicating sectarian rage won him the bully pulpit in order to take the Faucis of the world down a peg.

Dr. Fauci is a good man. He has devoted his life and estimable technical gifts to the public weal. His role in PEPFAR alone, not to mention Operation Warp Speed, should seal his place in the book of noble public servants. Nonetheless, he is a leader elevated in a bygone era whose virtues are wrong for the present age.

In a world of institutional monopoly on technical knowledge and societal narrative — the industrial information ecosystem of the 20th Century — the license to tell the noble lie was one of the highest badges of elite merit. Aspiring technocrats day dreamt in Ivy League libraries of the public crisis during which they might be called upon to lie to the naive face of Joe Public for his own good, all while feeling a warm glow of both intellectual superiority and moral rectitude.

Yet in a world where the flow of information is less like that of a unidirectional command through an industrial hierarchy and more like that of a leaking industrial solvent corroding the pipes that carry it, the noble lie (once revealed) is a grave threat to what shred of public trust in institutions remains.

Revealing the noble lie at this juncture, when public trust in authority is not an abstraction but an essential prerequisite to the widespread adoption of world-saving vaccines, is a devastatingly bad judgment call that can only come from someone as bright and well-intentioned as Dr. Fauci when he is being loyal to an institutional value system that made the noble lie a key feature of his public-health ministerial portfolio.

If we want a “legitimate hierarchy” — the kind that might be able to achieve the requisite buy in for a world-saving vaccine — we now require new virtues and values among our leaders.

As Gurri himself writes, “The qualities I would look for among elites to get politics off this treadmill are honesty and humility: old-school virtues, long accepted to be the living spirit behind the machinery of the democratic republic, though now almost lost from sight.”

I leave it to the reader to determine whether the clinical mien of Dr. Fauci evinces humility.

Needless to say, the noble lie is not honesty. Since Dr. Fauci is a good man loyal to public well-being he should use his technocratic perch to communicate to our budding next generation of elites that the time has come for a new ethic of elite truth-telling that aligns the esoteric and exoteric narratives.

The development of safe and effective COVID-19 vaccines is a triumph of the elite — a technical problem solved. While the elite are competent at solving technical problems, they mistook this ability for the capacity to solve social problems. As Gurri puts it:

Modern government’s original sin is pride. It was elected on a boast — that it can solve any “problem,” even to fixing the human condition — and it endures on a sickly diet of utopian expectations. We now know better. Since the fall of the Soviet Union, we have understood that even the most brutal application of power cannot redeem the human lot.

Martin Gurri, The Revolt of the Public (Stripe Press 2018), 424.

It is revealing that Dr. Fauci’s noble lie centered around the concept of herd immunity. Given the development of multiple safe and effective COVID-19 vaccines, herd immunity in large part becomes a function of public adoption of the inoculation, which in turn is in large part a function of public trust in authority.

Fauci’s increasing confidence in the public’s willingness to get the jabs led him to reveal that herd immunity was further away than he previously told. The logic of this communication strategy — to this observer at least — is not immediately obvious. Presumably Fauci’s thinking was that the public should not be demoralized by a goal that is too far away as to appear unattainable, as that demoralization would lead too many citizens to forego the vaccine, effectively thinking “since we’ll never get to 90%, what’s the use in me bothering to get the vaccine at all” — call this the “demoralization theory.” This theory of human reasoning, however, is also not obviously correct. One can imagine — and in fact has observed — public health communications that make the picture look worse to the public than it actually is in order to inspire action; this approach with respect to herd immunity would make one offer a higher estimate in order to scare the public into getting vaccinated in droves if we’re to have any hope at all of beating this thing — call this the “scared straight theory.”

Public health communicators have lied on both sides of the ledger — making the problem seem more manageable than it is and worse than it actually is in order to inspire desirable public action. This inconsistency in the strategy of the noble lie reveals a belief in the value of noble lying itself that is stronger than a belief in either the demoralization or scared straight theories of public action. Again, the elite are competent at solving technical problems (developing a safe and effective COVID-19 vaccine) but incompetent at solving social problems: nudging public behavior in the right direction.

In discussing herd immunity, Dr. Fauci is essentially discussing how much longer we have to live in fear and a state of suspended animation. He acted the part of the parent driver on the road trip who fibs “just a little farther” in response to “are we there yet” in order to forestall a tantrum (or mutiny).

Query, however, what the appropriate metric for the end of our lives in fear and suspended animation actually should be. When a safe and effective vaccine is in the offing, high levels of caution and risk aversion are eminently rational — as we may actually slay this dragon. This observer endorses this approach based on the belief that the dragon will actually be slain by the technical miracle of our COVID-19 vaccines. Yet if the dragon were somehow not likely to be slain, by this observer’s lights, life in the bunker would still need to end at some point nonetheless. Reasonable precautions like masks and rapid at-home testing would remain eminently sensible and essential in a world of an extant dragon and reemergence from the bunker, yet all dreams deferred would not remain sensible: we can sacrifice one Thanksgiving and one Christmas with loved ones, but any more beyond that and what life really are we preserving in the bunker? Noble lies avoid this question. A healthy and competent society should not be in the business of avoiding difficult questions, nor should its leaders.