Exploring the role of data enclosure in the digital political economy

Brenden Kuerbis and Milton Mueller

Telecommunications Policy, 2023, vol. 47, issue 8

Abstract: This exploratory research analyzes the impact of data enclosure initiatives on market competition. Data enclosure is the process by which the information about user activity generated by digital operations are withdrawn from an open or shared arrangement with other operators and made more exclusive to the service providers whose operations generate the data. We make the case that data enclosure is emerging as a significant feature of the multi-sided markets of digital platform providers, by looking empirically at, 1) the encryption of DNS query data using the DNS over HTTPS (DoH) protocol, and 2) the enclosure of Apple and Google's mobile identifiers used in digital advertising and cross-app user tracking. These efforts are not only privacy-enhancing moves, but also a means by which service providers compete with each other over the value and security of data. We assess the degree to which exclusivity of data fosters or forecloses competition in the relevant markets, and find mixed results. DoH, apparently a more disruptive form of data enclosure, has had little impact on industry shares so far, primarily because it was embraced by a small-share, declining actor, but the growing use of DoH and other encrypted DNS protocols does indicate a market-driven response to privacy-enhancement. In mobile identifiers in adtech, the shift in the default from opt-out permission to opt-in permission had both strong privacy effects and major effects on the distribution of revenues in the industry. But the changes are recent and the situation remains unsettled.

Keywords: Competition; Data enclosure; Digital political economy; Platforms; Privacy; Property rights (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1016/j.telpol.2023.102599

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