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Economic properties of data and the monopolistic tendencies of data economy: policies to limit an Orwellian possibility

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  • Hoi Wai Jackie Cheng

Abstract

The potential of data for supporting development is bounded only by the amount and variety of data that can be collected and analyzed, which is to say it is almost infinite. However, if data’s vast benefits are disproportionately captured by few in the society, leaving no one behind – an overarching principle of the Sustainable Development Goals – would be difficult to attain, even when everyone benefits from the use of data. This paper discusses key data properties and dynamics in data economy that create the tendencies for monopolies to emerge, reinforcing unbalanced power between corporates and other actors and generating negative distributional implications. If mismanaged, transformation toward the data economy could end up being an unequalizing force in an already highly-unequal world. In the context of data economy, this paper presents critiques of the common approaches to deal with monopolies. Self-correction in market is unlikely to happen fast enough but breaking up or nationalizing data monopolies are undesirable from effectiveness and innovation perspectives. Strengthening data ownership is key to rebalancing the power asymmetry between corporates and digital subjects, but difficulty of data valuation needs to be overcome. Analyses in this paper support further exploring the idea of setting up an independent, accountable and forward-looking Digital Authority that has both competition and non-competition goals.

Suggested Citation

  • Hoi Wai Jackie Cheng, 2020. "Economic properties of data and the monopolistic tendencies of data economy: policies to limit an Orwellian possibility," Working Papers 164, United Nations, Department of Economics and Social Affairs.
    • Handle: RePEc:une:wpaper:164
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    Cited by:

    1. Mihaela Tofan & Ionel Bostan, 2022. "Some Implications of the Development of E-Commerce on EU Tax Regulations," Laws, MDPI, vol. 11(1), pages 1-26, February.

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    More about this item

    Keywords

    Data economy; Data properties; Market competition; Monopoly; Inequality; Consumer protection;
    All these keywords.

    JEL classification:

    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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