By Elisa V. Mariscal & Alexander Elbittar (Centro de Investigación y Docencia Económicas; CIDE)
Digitization has not only changed the physical means by which we capture commercial information but also its scale, scope and detail. Registering individual’s information now involves capturing preferences while noting their heterogeneity. Now consumers not only consume data but generate or produce large amounts of data (prosumer). Digitization has allowed companies to have direct contact with their consumers, thus opening the possibility for them to mine data directly, catered to their immediate and changing needs. This is only possible when algorithms are built to reap the information contained in a universe of zeros and ones. As algorithms become more effective at unraveling information from Big Data, reaching equilibrium in a market may be possible with a lower variance, thus enhancing the allocation process in terms both of welfare and speed. The central question for any antitrust analysis is not really whether large volumes of data exist associated to a conduct, merger or market, but how it can be specifically exploited and analyzed. Whether there are endogenous and exogenous conditions in place that affect competition in a market and make it relatively easy or hard for economic agents to behave in anticompetitive ways, or for markets to tip, or to become increasingly less efficient.
