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Neither privacy nor competition? The economics of "freely given consent" in Article 5(2) DMA

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  • Färber, Nina Lena
  • Hey, Florian

Abstract

Article 5(2) of the Digital Markets Act (DMA) prohibits gatekeepers from combining personal data across core platform services unless end users consent within the meaning of the General Data Protection Regulation (GDPR). This paper argues that importing the GDPR's consent standard into a competition-driven provision produces a structurally mismatched regulatory design. Drawing on competition economics, we examine the underlying data combination rent and show that this rent, rather than raw data volume, constitutes the primary source of gatekeeper dominance. This rent is economically ambivalent: pro-competitive where combined data improves products, anti-competitive where it serves surplus extraction. Yet Article 5(2) DMA faces user-related constraints for acknowledging its economic ambivalence, because it rather restricts what is harmful only conditionally. We demonstrate that consent, when applied in markets characterized by pronounced power asymmetries, generates predictable welfare losses: entrenching incumbents, fragmenting data ecosystems, and reducing consumer welfare without effectively constraining the rent it targets. In particular, we argue that data-based payment constitutes an economically distinctive mode of exchange that, unlike monetary payment, does not directly deplete disposable income. The resulting two-fold regulatory impasse implies that neither widespread consent nor widespread refusal advances market contestability or data sovereignty. In response, we assess alternatives, including data fiduciaries, data intermediaries, and portability-based data markets, that target the data combination rent more directly. None dominates on all margins. The choice among imperfect institutions is comparative. We conclude that, if data combination is to be governed at all, effective regulation requires instruments calibrated to the economic structure of data-driven markets rather than to the individual autonomy framework of data protection regulation.

Suggested Citation

  • Färber, Nina Lena & Hey, Florian, 2026. "Neither privacy nor competition? The economics of "freely given consent" in Article 5(2) DMA," Ilmenau Economics Discussion Papers 214, Ilmenau University of Technology, Institute of Economics.
    • Handle: RePEc:zbw:tuiedp:343556
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    References listed on IDEAS

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    1. repec:hal:journl:hal-04810695 is not listed on IDEAS
    2. Cristina Simone & Antonio Laudando, 2025. "Principles and obligations of the Digital Markets Act in regulating the economic power of gatekeepers: Positive, negative or trade-off effects?," Electronic Markets, Springer;IIM University of St. Gallen, vol. 35(1), pages 1-27, December.
    3. Dirk Bergemann & Jacques Crémer & David Dinielli & Carl-Christian Groh & Paul Heidhues & Maximilian Schäfer & Monika Schnitzer & Fiona Scott Morton & Katja Seim & Michael Sullivan, 2023. "Market design for personal data," Post-Print hal-04213208, HAL.
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    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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