Part IV What are the Risks if Competition Authorities Ignore or Downplay Big Data?, 13 Two More Network Effects: Scope of Data and Spill-Over Effects

Subject(s):

Market power — Rights — Internet — Technology — Spill-over or coordinative effects

This chapter analyses two more network effects: the scope of data and spill-over effects. It shows how the feedback loop is accelerated when the company harnesses the variety of data across its platform to improve the quality of its product, which attracts more users who provide the company with more data to further improve. These effects are examined through Facebook’s digital assistant ‘M’ and search engines. Through the scope of data effect, the more users rely on the platform’s other services, the greater the variety of personal data on particular users, the better the digital assistant can segment results by user profiles, and the better the digital assistant can personalize results. On the other hand, under spill-over effects, the growth of users on one side of the multi-sided platform can attract more advertisers or suppliers on the other side of the platform, which in turn attracts more users, advertisers, and suppliers.