WASHINGTON D.C. — Today, Verizon announced that it has agreed to acquire Yahoo for $4.8 billion. Yahoo’s main benefit for Verizon would be as a platform for advertising revenue, yet the requirement in the proposed privacy rules for customers to opt-in to allow their data to be used for third-party advertising would greatly impede Verizon’s ability to offer more valuable ads.
“The deal creates a stronger competitor to Google in the advertising and web services markets, and that ultimately benefits consumers,”said Berin Szóka, President of TechFreedom. “Antitrust regulators should approve the deal swiftly; the more time the two companies spend waiting at the altar, the harder it will be for them to catch up with Google and other competitors.”
“The biggest challenge for the combined company is the FCC’s proposed privacy rules,” continued Szoka. “The FCC would require Verizon to obtain a separate opt-in from its broadband customers for any Yahoo! service, regardless of how sensitive that data at issue is. That blanket rule will make it a lot harder for Verizon to innovate — not just in advertising, but in other apps and services that it could offer to its customers. A more flexible approach would have focused on the sensitivity of the data and the use, rather than drawing arbitrary lines inside the combined company. That would have better balanced the need for consumer protection with the benefits to competition from the merger.
“When the FCC reclassified broadband under Title II, it stripped the FTC of its authority over Internet access providers,” said Evan Swarztrauber, Communications Director at TechFreedom.. “That was bad enough, but at least the FCC could have adopted the FTC’s privacy standards, which require that the agency weigh competitive benefits, and focus on case-by-case enforcement rather than bright-line rules. Now we have a double standard, with the broadband half of Verizon subject to the FCC’s rules but the Yahoo! half under the FTC’s.”.”
“This is just the latest example of technological change destroying the arbitrary silos that drive so many policy debates,” concluded Swarztrauber. “As companies like Verizon and Google increasingly offer both ‘core’ and ‘edge’ services, the case for technologically neutral regulation grows.”