Selected Publications: Big data and big techs

6. Januar 2021, von Pedro Magalhães Batista

Foto: EV

The European Journal of Law and Economics published a special issue this last December on Big Data. One of the contributions comes from Alain Marciano, Antonio Nicita, and Giovanni Battista Ramello, "Big data and big techs: understanding the value of information in platform capitalism." The authors introduce us to the major aspects of platform capitalism's dilemma between decentralization and concentration and how such dilemma impacts the organization and regulation of the economy.  While we might expect that big data would reduce transaction costs leading to a preference for higher market transactions relative to hierarchical transactions - decentralization -, network effects and algorithms' efficiency improving the value of collected data might amplify platforms' efficiency - concentration.

A major contribution is the embeddedness of the law & economics rationale to analyse the challenge of "how to provide good and efficient governance of the transition between the old and the new world." The authors help us better understand two paradoxes that explain how the platform's efficiency might conflict with the market's efficiency. These efficiency paradoxes are the privatization of public good information by big data extraction and the platform's capacity to discriminate strategies - e.g., price and non-price - by algorithmic profiling, leading to a weakening of consumers' freedom to choose and higher exit costs. Finally, the authors also debate recent policies' role and value to counter these paradoxes, such as data portability and antitrust policy.