Data is the new ‘OIL’ as it is the world’s most valuable resource

Data is being produced in vast streams on daily basis in today’s digitally transformed and connected world. Increasing at a mind-blowing volume and pace, data has replaced the world’s most valuable resource i.e. oil. This has become a fast-growing industry which has prompted antitrust regulators to step in to restrain those who control its flow. The concerns that were related to oil centuries ago are now being linked to the increasing data. It is because the digital companies such as Google’s parent company Alphabet, Apple, Amazon, Facebook, and Microsoft look unstoppable and are considered as the five most valuable listed firms in the world.

Almost all the revenue growth in digital advertising was related to Google and Facebook last year whereas Amazon captures half of all dollars spent in the U.S. online. This kind of dominance has called for the tech giants to be broken up but it has been argued that their size is not just the crime; the success of tech giants has benefited the consumers worldwide. Also, these firms do not raise the alarm when a standard antitrust test is applied. A lot of the services that are being provided are free of any cost. The market shares look less worrying when taking account of the offline rivals.

The Abundance Of Data Has Changed The Competition

Data is available in abundance because of the smartphones and the internet. Every activity creates a trace of its own whether you are going for a run, watching television or even just stuck in the traffic. Once digital devices connect to the internet, more data is created. Whereas the artificial techniques including machine learning, generate more value from the data. The abundance of data has changed the nature of competition, the more users sign up for Facebook, the more attractive the signing up becomes for others. With the collection of data, a firm can improve its products and services more easily. With the availability of data, companies are protected from their rival firms as in the case of tech giants, the surveillance systems can span the entire economy.

Sharing of Data could threaten the privacy

The idea of breaking up Google into smaller firms will not stop the network effects as in time; one of them will become dominant again. For this purpose, radical thinking is required. Initially, the antitrust authorities need to move from the industrial era to the 21^st century. They need to take into account the extent of firms’ data assets while assessing the deal. After that, the grip that the providers of the online services have over data should be relaxed and more control should be given to those who supply them. With transparency, the companies would be forced to reveal to consumers the information they hold and the revenue they make from it.

But rebooting antitrust will not be easy because it entails new risks as more sharing of the data can threaten the privacy. If the government doesn’t want the economy to be dominated by a few tech giants, then something should be done soon.