Abstract
This chapter analyzes digital platforms that are marked by a transition from a user-based to market-based entity. By focusing on a migration between digital organizations, user labor practices and regulation, we investigate the trajectories of ‘community and monetization’ emerging with the platformization of the Internet, in order to uncover a growing constitutional legitimacy gap in multi-sided business models. We therefore attempt to unravel the delicate balance between regulation and co-regulation of digital platforms. Co-regulation entails taking into account the interests of multiple actors, incorporating different incentives for (user) participation across the ‘value chain’, which are said to increase transparency, pluralism, trust and respect for privacy. Based on legal cases surrounding Facebook, we make a case for a co-regulatory framework.
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Notes
- 1.
MOO is short for Multi-User Dungeon (MUD), Object Oriented.
- 2.
Early forms of sharing content can already be seen as early as in the 1970s such as via Bulletin Board Systems and Multi-User Dungeons; however, the communal aspect took off only in the 1990s via the countless user communities (Burgess and Woodford 2015).
- 3.
- 4.
- 5.
So-called ‘volunteered’ data, such as Web queries, photos, videos, texts, likes, are ‘shared’ and ‘observed’ by a variety of Web services through various applications like browser cookies or location trackers which record a gigantic mass of online behavioral data (or ‘inferred data’).
- 6.
- 7.
Increasingly, governments are collecting, analyzing and exchanging information about their citizens. As a result, human rights watch organizations including watchdogs such as the EU Data Protection Supervisor can be seen to critically address possible government abuse of surveillance powers, making a case for greater transparency.
- 8.
Note that over the last three decades or so, the study of personal information-driven markets has evolved, it is currently not an easy task to keep track of what is happening in real markets. For example, already in the 1980s, the Chicago school of economics explicated privacy as a cause for information asymmetries, creating inefficiencies in the marketplace. Currently, debates differentiate between the economics of privacy at the stage of information disclosure and later stages of information use as well as, increasingly, connections are made between personal information markets to the concept of multi-sided markets (Hildebrandt and van den Berg 2016).
- 9.
For example, the European Commission passed the General Data Protection Regulation (GDPR) and which from mid-May 2018 onward will replace the current Data Protection Directive (95/46/EC). It sets out to provide a legal framework that enables European users to better control the use of their content—volunteered, observed or inferred—by third parties, such as via default settings and understand the way their data are handled online as well as what international businesses can and cannot do in handling personal data outside of Europe. See http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32016R0679.
- 10.
The S-1 form contains basic business and financial information based on which investors make informed investment decisions (by researching the prospectus prior to an IPO). Thus, the S-1 form requires an organization to make its business plan explicit including, among others, its value propositions to different parties (such as users, advertisers, websites, platform partners), market opportunities, product and services and possible risk factors.
- 11.
Case No. 11-CV-01726-LHK, United States District Court for the Northern District of California.
- 12.
The ‘monetization’ trend appeared to intensify one year prior to its IPO filing so as to demonstrate that the platform is (financially) self-sufficient, sustainable and profitable.
- 13.
- 14.
Risk factors are also provided and point out the crucial role of advertizing—that a reduction in spending or loss of advertisers could severely harm the business as well as that products and services are subjected to, often, changing, US and foreign laws and which can also (negatively) affect the business. In particular, laws and regulation about privacy, data protection and so forth are increasingly ‘subject to change and uncertain interpretation’, and which can ‘result in claims, changes to our business practices, increased cost of operations, or declines in user growth or engagement, or otherwise harm’ (S-1, p. 18) these firms.
- 15.
- 16.
- 17.
See http://trends.builtwith.com/widgets/Facebook-Like (Retrieved on 13 July 2015).
- 18.
In itself this is not unique. However, in contrast to many other tracking services, Alcar et al. (2015, p. 2) argue that Facebook ‘can easily link the browsing behavior of its users to their real world identities, social network interactions, offline purchases, and highly sensitive data such as medical information, religion, and sexual and political preferences’. In addition, they found that the use of certain cookies on non-Facebook pages facilitates tracking via its social plug-ins of non-Facebook users. Also, in combining data from various sites, such as Whatsapp and Instagram, Facebook can yield more robust insights into user profiles. Yet, its users can only opt out of profiling activities for third-party advertizing (Van Alsenoy et al. 2015). Note that when users remove cookies from their device that previously entered opt-out preferences are deleted, and need to be re-entered.
- 19.
- 20.
Ibid.
- 21.
Soft law is considered to be not legally binding yet can have in/direct legal implications in the real world.
- 22.
See, for example, The Court of Justice of the European Union vis-à-vis the Charter of Fundamental Rights (which incorporates the European Convention on Human Rights into European Union law) regarding the rights of privacy of people (see, e.g., http://ec.europa.eu/justice/fundamental-rights/files/2014_annual_charter_report_en.pdf); or, the E-Commerce Directive in the context of (ECD) ‘safe harboring’ and Codes of Conduct.
- 23.
Data are not simply ‘there’, waiting to be gathered, stored and analyzed, rather data are generated in a particular historical, social, cultural and economical circumstances (Gitelman 2013).
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Acknowledgments
We are indebted to Chris Marsden for his inspiration on numerous occasions and Rob Heyman for sharing his intel on online advertizing.
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van der Graaf, S., Fisher, E. (2017). The Imperative of Code: Labor, Regulation and Legitimacy. In: Meil, P., Kirov, V. (eds) Policy Implications of Virtual Work. Dynamics of Virtual Work. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-52057-5_5
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