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- Title
Data-Driven Envelopment with Privacy-Policy Tying.
- Authors
Condorelli, Daniele; Padilla, Jorge
- Abstract
We present a theory of monopoly protection by means of entry in adjacent markets that have a common customer base (i.e. envelopment). A firm dominant in its market enters a data-rich secondary market and engages in predatory pricing and privacy-policy tying. We define the latter as conditioning service provision to the subscription of a privacy policy that allows bundling of user data across all sources. Acquiring data from the secondary market confers an advantage in the data-intensive primary market that shields the dominant firm from entry, thus harming consumers. We discuss potential remedies, including data unbundling and portability.
- Subjects
PREDATORY pricing; SECONDARY markets; MARKET entry; CONSUMERS; SUBSCRIPTION services
- Publication
Economic Journal, 2024, Vol 134, Issue 658, p515
- ISSN
0013-0133
- Publication type
Article
- DOI
10.1093/ej/uead090