Big Data Competition and Market Power

Abstract

Big data are considered at the same time a promising driver of economic development and a concern for possible manipulation and privacy intrusion. Data diffusion and their uncertain appropriability can make property rights regarding data less precise than those regarding traditional goods. The article reviews some economic features of data. In many digital markets data can be considered a relevant input for production but hardly an essential facility. Many data are collected in two-sided market platforms and on the one side, they are used to personalise services and to add quality, while on the other side of the platform they contribute to make advertising collection more efficient. So, the transfer of personal data can be considered an implicit price for many free information services. Consumers are usually unaware of subsequent pervasive use of their personal data, and therefore give them away easily. Big data can amplify competitive advantages and related dominant positions, leveraging on information asymmetries. A dominant position obtained through collection and processing of big amounts of personal data allow practices such as first-degree price discrimination, personalised advertising, and artificial degradation of services that can sometimes be considered competitive abuse, but it is difficult that data alone allow to maintain a true dominant position.