Data Ownership, Regulation, and Blockchain Dominate Today’s Platform Markets
By Geoffrey Parker, Marshall Van Alstyne, and Peter Evans
It’s been an eventful year for digital platforms. While still true to their origin as open marketplaces and production facilitators for goods and services, the trajectory has veered and platforms have become a focal point of online data exchange and all its permutations. Consider the following major developments:
- Facebook ads are linked to fake news and election meddling, and revelations surface of data leakage to Cambridge Analytica;
- General Data Protection Regulation (GDPR) takes effect in the E.U. with regulatory privacy changes that establish users’ data rights and enforce corporate transparency;
- The Payments Service Directive 2 (PSD2) obligates banks in the E.U. to open their systems for payment service providers and account aggregators;
- Blockchain spreads beyond cryptocurrencies into data watermarking and online business contracting.
New Role for Distributed Ledgers
Although there is danger of hype, Blockchain technologies may be key to establishing the origin of data and the rights of other entities to use that data. Distributed-ledger technologies can shift organizational forms from centralized to decentralized, and give users rights to their data. As we wrote in a recent academic article:
“In contrast to a centralized infrastructure controlled by a single party (e.g., a bank, an electricity provider, a logistics provider, etc.), distributed ledgers that enable smart contracts can perform trusted operations in a decentralized infrastructure. Through a consensus mechanism, parties with the right to validate new transactions can update the Blockchain and interact directly with each other anonymously, and without the need for central coordination.
Blockchain infrastructure holds out great promise, to increase the speed of exchange, reduce the number of intermediaries and associated costs, improve security, digitize assets, give wider access to disadvantaged groups (especially in emerging economies), and improve regulatory compliance.”
Clearly, there was no shortage of fresh topics to explore as we approached the 2018 Platform Strategy Summit at MIT on July 13. A wide range of industrial executives--representing Rolls Royce, digital platforms Uber and Airbnb, Thomson Reuters, and Kaiser Permanente--addressed the impact of platform developments on their businesses and on global markets. Panels on Blockchain, entertainment, healthcare, and AI-driven innovation drilled down on emerging technologies and future directions.
Several important themes are dominating the platform conversation this year. Whereas, earlier concerns centered on how to set up or participate in digital markets, questions of privacy are top-of-mind again, as Cambridge Analytica and GDPR continue to make headlines. We will contrast the very different regulatory approaches in the E.U. and U.S., and discuss what dominant as well as smaller companies are doing to comply. More broadly, we’ll take a macro view of the key issues of how to create value from the rapid explosion of data, who owns it, and how is it shared?
Continue reading the full blog on our Medium publication here.