The use and abuse of data by Facebook and other tech companies are finally garnering the official attention they deserve. With personal data becoming the world’s most valuable commodity, will users be the platform economy’s masters or its slaves?
Do we really want to live in a society where our innermost desires and manifestations of personal agency are up for sale? To change this will require focusing directly on the prevailing business model, and specifically on the source of economic rents. Just as landowners in the 17th century extracted rents from land-price inflation, and just as robber barons profited from the scarcity of oil, today’s platform firms are extracting value through the monopolisation of search and e-commerce services.
But now, both companies use their dominant positions to stifle competition, by controlling which products users see and favouring their own brands . Meanwhile, companies that do not advertise on these platforms find themselves at a severe disadvantage. As Tim O’Reilly has argued, over time, such rent-seeking weakens the ecosystem of suppliers that the platforms were originally created to serve.
Moreover, the widespread use of tax arbitrage and contract workers is eroding the markets and institutions upon which the platform economy relies. Rather than talking about regulation, then, we need to go further, embracing concepts such as co-creation. Governments can and should be shaping markets to ensure that collectively created value serves collective ends.
To realise that potential, we will need to rethink the governance of data, develop new institutions, and, given the dynamics of the platform economy, experiment with alternative forms of ownership. To take just one of many examples, the data that one generates when using Google Maps — or any other platform that relies on taxpayer-funded technologies — should be used to improve public transportation and other services, rather than simply becoming private profits.
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