Let us mitigate the adverse impact of data monopolies
market capitalization in 2023 included four technology companies, one social media platform, and one online marketplace. In 2009, their collective number was one. In 14 years, digital companies, led by data usage, have challenged the neoclassical approach to business.
Data is the new oil, analytics the refinery, and artificial intelligence the gasoline powering the digital economy. Interestingly, the marginal utility of data never diminishes. Also, even though data is non-rivalrous, its access and use can be denied.
This has created new challenges, especially for competition policy. Its existing framework all over the world, based as it is on a neoclassical economic model, never anticipated zero-pricing business models by digital services. However, it is pertinent to note that zero pricing does not imply zero cost.
When users avail of digital services, they inevitably reveal rich information about themselves and others, which constitutes information cost. Their exposure to advertisements while using zero-priced platforms forms attention cost. Data as a barrier to entry: Digital markets are characterized by network effects, driven by feedback loops.
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