Data and Market Power

Companies increasingly possess huge amounts of big data which are used for different business purposes. Against this backdrop, this chapter intends to answer whether data possession directly translates into market dominance for firms. The analysis encompasses the different markets associated with big data, both upstream and downstream. A specific focus is directed towards multi-sided platforms whose business model is based on the collection and exploitation of data. The chapter concludes that, while big data may not be generally considered as a key factor for a firm’s market power, it can nonetheless play a role in the specific case of multi-sided platforms. More to the point, contingent on a case by case assessment, big data can contribute to shielding a platform’s dominant position, particularly when coupled with specific economic features. In essence, this chapter posits that big data may act ad entry barriers in certain scenarios.