1887

UN Department of Economic and Social Affairs (DESA) Working Papers

The UN Department of Economic and Social Affairs (DESA) Working Papers aim to stimulate discussion and critical comment on the broad range of economic, social and environmental issues associated with the United Nations Development Agenda.

English

Economic Properties of Data and the Monopolistic Tendencies of Data Economy: Policies to Limit an Orwellian Possibility

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 noncompetition goals.

English

Keywords: Market competition, Data properties, Data economy, Consumer protection, Monopoly, Inequality
JEL: D18: Microeconomics / Household Behavior and Family Economics / Consumer Protection; 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; D42: Microeconomics / Market Structure, Pricing, and Design / Market Structure, Pricing, and Design: Monopoly
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