Abstract
About a decade has now passed since the fourth industrial revolution took root in our post-modern society. With the aim of giving a clear picture of the digital economy, this chapter is designed to cover the state of the art and major developments under this economic system. Accordingly, we will look at the information society and the digital economy on which such society is built on. An extensive discussion on the monopolization of digital platforms, free riding of the Web, smart business models, and emerging technologies will be presented. In addition, by having a closer look at the business models of major digital companies, the chapter will give an insight into the digital businesses of this economic system. Here, we will briefly discuss the business models of tech giants such as Google, Amazon, Alibaba, Uber, Airbnb, and Shopify and also discuss the startups with Fintech solutions. On the governance side of networks of the information society, we will have a look at the issue of trust and social capital built through rating and reputation schemes in digital platforms. Further, the chapter will cover the major regulatory frameworks and policies toward this economic system and identify the main influences such policies have on the information society and the digital economy. Major regulatory developments such as the global consumer protection initiative, e-consumer.gov, the General Data Protection Regulation (GDPR), California Consumer Privacy Act, taxation of multinationals, and lobbying by the tech giants are some of the points to be covered under this section. In the section that follows, we will have an overview of this economic system.
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Notes
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Rifkin, 2014
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Source: IMF Staff Report, 2018, on Measuring the Digital Economy, www.imf.org/en/Publications/Policy-Papers/Issues/2018/04/03/022818-measuring-the-digital-economy
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See ecommerce forecast at statista.com.
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Source: Author’s extraction based on ITU Statistics, available at www.itu.int/ict/statistics
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Source: Author’s extraction based on UNCTADstat, available at https://unctadstat.unctad.org/
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UNCTAD Digital Economy Report 2019
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Statista, available at www.statista.com/statistics/216573/worldwide-market-share-of-search-engines/
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Statista, available at www.statista.com/statistics/272014/global-social-networks-ranked-by-number-of-users/
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See Forbes Top 100 Digital Companies, available at www.forbes.com/top-digital-companies/list/#tab:rank
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Source: Author’s extraction based on data from Statista, available at www.statista.com/statistics/272014/global-social-networks-ranked-by-number-of-users/
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The Guardian News available at www.theguardian.com/technology/2019/jun/03/tech-monopoly-congress-increases-antitrust-scrutiny-on-facebook-google-amazon, accessed on May 22, 2020.
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Ars Technica “Justice Department launches antitrust probe into big tech,” available at https://arstechnica.com/tech-policy/2019/07/justice-department-launches-antitrust-probe-into-big-tech/, accessed on May 22, 2020.
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Bloomberg Technology, www.bloomberg.com/news/articles/2019-06-03/google-has-antitrust-playbook-ready-for-doj-after-eu-challenges, accessed on May 22, 2020.
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The Verge, www.theverge.com/2019/3/20/18270891/google-eu-antitrust-fine-adsense-advertising, accessed on May 22, 2020.
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The National Post on February 19, 2020, reported news stating “‘The news industry is in trouble’: Canadian media outlets team up to demand tax and regulatory changes,” available at https://nationalpost.com/news/canada/the-news-industry-is-in-trouble-canadian-media-outlets-team-up-to-demand-tax-and-regulatory-changes
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UNCTAD Digital Economy Report 2019
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See McKinsey Global Institute’s briefing, January 2019, on Navigating a world of disruption, available at www.mckinsey.com/featured-insights/innovation-and-growth/navigating-a-world-of-disruption
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See Tech Times for the details on the Top 5 Best AI Solutions In 2019, available at www.techtimes.com/brandspin/243818/20190919/top-5-best-ai-solutions-in-2019.htm
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Visual Capitalist at www.visualcapitalist.com/startups-improve-odds-unicorn/, accessed on May 22, 2020.
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Based on data fetched from Statista, www.statista.com/outlook/243/100/ecommerce/worldwide
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About eBooks at https://about.ebooks.com/ebook-industry-news-feed/, accessed on May 22, 2020.
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https://sellercentral.amazon.com/gp/help/external/200336920?language=en_US&ref=efph_200336920_cont_201822160, accessed on December 15, 2019.
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TJI Research, https://this.just.in/amazon-developing-new-space-and-satellite-services/, accessed on May 22, 2020.
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Macrotrends, www.macrotrends.net/stocks/charts/BABA/alibaba/revenue, accessed on March 20, 2020.
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Marketplace Pulse, www.marketplacepulse.com/stats/shopify/shopify-merchant-solutions-revenue-131, accessed on May 22, 2020.
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Shopify financial data available at https://investors.shopify.com/Investor-News-Details/2019/Shopify-Announces-Third-Quarter-2019-Financial-Results/default.aspx, accessed on March 20, 2020.
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CNBC ranked Uber second from the list of 2018 CNBC Disruptor 50 companies, Disrupting: Public transportation, taxi, and limousine services, www.cnbc.com/2018/05/22/uber-2018-disruptor-50.html, accessed on May 22, 2020.
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https://investor.uber.com/news-events/news/press-release-details/2019/Uber-Announces-Results-for-Third-Quarter-2019/, accessed on March 20, 2020.
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See ABC for some points on Legal Implications of Self-Driving Vehicle Technology, available at www.americanbar.org/groups/litigation/committees/business-torts-unfair-competition/practice/2018/top-8-legal-implications-of-self-driving-car-technology-litigation/, accessed on May 22, 2020.
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See Airbnb service fees at www.airbnb.ca/help/article/1857/what-is-the-airbnb-service-fee?locale=en&_set_bev_on_new_domain=1577510813_vPS6N5PQtaytKsO3, accessed on March 20, 2020.
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A survey on 1021 Airbnb horror stories shows uncovered various unchecked dangerous loopholes and scams around the short-term rental platform, www.asherfergusson.com/airbnb/, accessed on May 22, 2020.
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www.bbc.com/news/technology-50506431, accessed on May 22, 2020.
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https://fortune.com/2018/10/30/data-regulation-tech-industry/, accessed on May 22, 2020.
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. The issue of illegal sale of human kidneys for auction had been a topic of discussion around the ecommerce marketplaces, late in 1999. The kidney that was listed on eBay had reached a bid of $5.75 million until it was removed by eBay. See www.nytimes.com/1999/09/03/us/auction-for-a-kidney-pops-up-on-ebay-s-site.html
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Source: e-consumer.gov
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See the Digital Services Tax: response to the consultation, 2019, available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/816389/DST_response_document_web.pdf
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- 81.
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“Uganda Plans Reforms to Tap Facebook, Google Advertising Revenue,” Bloomberg Tax, October 24, 2019, available at https://news.bloombergtax.com/daily-tax-report-international/uganda-plans-reforms-to-tap-facebook-google-advertising-revenue
- 83.
See 2019 Affordability Report at the Alliance for Affordable Internet (A4AI), available at https://news.bloombergtax.com/daily-tax-report-international/uganda-plans-reforms-to-tap-facebook-google-advertising-revenue
- 84.
See the Public Consultation Document Secretariat Proposal for a “Unified Approach” under Pillar One, 2019, available at www.oecd.org/tax/beps/public-consultation-document-secretariat-proposal-unified-approach-pillar-one.pdf
- 85.
The New York Times, “As Nations Look to Tax Tech Firms, U.S. Scrambles to Broker a Deal,” July 12, 2019, at www.nytimes.com/2019/07/12/business/economy/tech-company-taxes.html
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See a blog post by Victoria Venn, November 11, 2019, Sales Tax for Digital Goods in the U.S., available at https://quaderno.io/blog/sales-tax-digital-products-us/
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National Law Review, available at www.natlawreview.com/article/2019-year-ccpa-infographic
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CNBC, www.cnbc.com/2019/06/09/google-is-techs-top-spender-on-lobbying-but-facebook-amazon-also-up.html, accessed on May 22, 2020.
- 90.
See OpenSecrets.org at www.opensecrets.org/news/2019/07/facebook-google-amazon-up-lobbying-game/, accessed on May 22, 2020.
- 91.
See Center for Responsive Politics at OpenSecrets.org.
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© 2020 Abeba N. Turi
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Turi, A.N. (2020). Digital Economy and the Information Society. In: Technologies for Modern Digital Entrepreneurship. Apress, Berkeley, CA. https://doi.org/10.1007/978-1-4842-6005-0_1
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