Concerns about anticompetitive conduct often lead companies to claim privacy and security as reasons to refuse to have their products and services interoperate with others. The Commission, as an agency that enforces both competition and consumer protection laws, is uniquely positioned to evaluate claims of privacy and data security that implicate competition.
Interoperability has important benefits, as well as privacy and security. The FTC has highlighted these benefits, which include aspects of technology that people often take for granted in their daily lives. Web pages can display regardless of web browser, emails can be sent and received regardless of email provider, and computer accessories can be plugged into most computers regardless of the manufacturer. Interoperability can also enhance consumer choice and competition.
The FTC has also emphasized the importance of digital privacy and security, using its authority to bring hundreds of enforcement actions against companies for privacy and data security violations. This includes cases involving the sharing of health-related data with third parties, the collection and sharing of sensitive television viewing data, and the failure to implement reasonable security measures to protect sensitive personal data such as Social Security numbers.
The FTC will closely scrutinize any claims that competition must be impeded to advance privacy or security. While certain safeguards for privacy and security can impede interoperability, interoperability can coexist with and even enhance privacy and security in various contexts.
As the FTC staff observed in the 2021 Nixing the Fix Report, manufacturers may use privacy and data security concerns as a pretext for anticompetitive conduct. The agency is committed to identifying and rejecting such justifications. Through vigorous law enforcement, the FTC strives to support a marketplace where new businesses can emerge, products can compete, and consumers’ digital privacy and security are protected.
Where dominant market participants use privacy and security as a justification to disallow interoperability and foreclose competition, the FTC will closely scrutinize those claims to determine whether they are well-founded and not pretextual.
