Digital Dictionary

D

Data Economy

Bruno Deffains

Université Paris 2 Panthéon-Assas, France

Data economy and regulation of digital giants

The data economy has become a thriving industry. A century ago, the strategic resource was oil, and its control by certain large companies, such as Standard Oil, gave rise to “antitrust” laws. Today, similar concerns are raised by the giants that collect and process big data, the oil of the digital age. Alphabet (Google’s parent company), Amazon, Apple, Facebook and Microsoft have steadily increased their power in this new economy. Their profits have not stopped growing. In the decade from 2010 to 2020, Amazon was able to capture 50% of every dollar spent online by American consumers. Google and Facebook, meanwhile, absorbed most of the growth in online advertising revenues.

Such dominance is a real challenge to the functioning of economies. Size alone is not a crime and the success of the digital giants has benefited consumers. Few people can do without Google’s search engine, Facebook’s network or Amazon’s same-day home delivery. These companies have long flown under the radar of competition authorities, as traditional tools are not always adapted to their practice. Indeed, most of the services offered seem to be free of charge, while the consumer often pays indirectly through the data they provide to the companies.

However, there is reason to wonder. The control of data by the Internet giants gives them considerable market power. The classic approach to ...