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Antitrust implications of Big Data

Increasingly, big data is becoming an important tool for understanding customer behavior. The information provided by the data can be used to understand customer behavior, predict consumption patterns and market products. Now, because big data has become such a central tool for effectively operating a company, companies are coming under fire for withholding big data from others in the industry. For precisely that reason, many of the country’s most visible organizations including Twitter, Facebook and Google, have recently been the target of antitrust litigation relating to the handling of their own data.1

For years, Twitter allowed a wide variety of third party developers to utilize their firehose of data. A few years ago, the company began to cut off access to this data, now allowing only three companies access to their full firehose of data.2 Many companies which constructed their business model around their access to Twitter’s data and those companies were left valueless without the information provided by Twitter. In 2012, PeopleBrowsr brought a suit against Twitter for antitrust violation under section 2 of the Sherman Act.3 PeopleBrowsr was given a temporary injunction to maintain access to the information, which appeared to be an incremental victory for the small company. Despite this, the two ultimately settled the case this year, giving PeopleBrowsr access to the information until the end of the year for a price of $1 million. While PeopleBrowsr is one of only a handful of small companies to receive such a settlement, the settlement is hardly a victory for the company who needs access to the firehose to continue to provide its services.4

Generally, the Sherman Act does not limit the right of privately owned and operated businesses to chose to engage or not engage in business with other private actors.5 The conflict at hand raises the question of when, if at all, information becomes so critical to business that the government would require disclosure. Twitter and those who own the data argue that requiring such a disclosure would amount to requiring them to engage in business relationships. Bolstering this argument is the fact that the value of big data is still highly speculative. Because the value of the information is unclear, it is unlikely the data would be considered a utility within the meaning of the Sherman Act, which would require the information to be disclosed.

PeopleBrowsr’s settlement outcome should serve as a cautionary tale to entrepreneurs considering a foray into the realm of big data. Companies that build their value around access to big data provided by other private organizations are at the whim of their providers. Should those big data providers elect to cut off access to their information, the recipient companies would be left effectively valueless. Without coverage under existing antitrust laws, it seems the most effective alternative for these organizations is to seek contractual protection. However, because the big data providers have a great deal of bargaining power, it is unlikely that these organizations would be willing to offer any contractual guarantees to data recipients.

Companies who utilize the big data provided by online powerhouses have very few legal assurances to protect their business models. Big data enthusiasts are adamant about the market opportunities for capitalizing on big data.6 Unfortunately, much of the speculation about the market value of big data may be overly optimistic in light of decreasing reliability of access to information. This insecure access will likely dampen the growth of startups that could capitalize on big data.

  1. David Golden, Refusals to Deal in the Big Data Era, Law 360 (Oct. 27, 2014), 

  2. Adrianne Jeffries, After Suing Twitter, PeopleBrowsr Wins Data Access Back in Settlement, The Verge (April 25, 2013), 

  3. PeopleBrowsr, Inc. v. Twitter, Inc., No. C-12-6120 EMC, 2013 WL 843032, at *1 (N.D. Cal. Mar. 6, 2013). 

  4. Jeffries, supra note 2. 

  5. Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 408 (2004). 

  6. Kenneth Cukier & Viktor Mayer-Schoenberger, The Rise of Big Data: How It’s Changing the Way We Think About the World, Foreign Affairs (May/June 2013), 

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Shannon Conaway