As more of the economy moves online, the importance of data mining and the asymmetry of control of information becomes ever more critical in economic markets. Addressing this change calls for far more active regulatory action to reverse the trends undermining user privacy and increasing economic inequality due to that rising information asymmetry. Such action should lead to a greater focus on big data platforms sharing the financial bounty of user information with those users, serving both equity and competition.
Data mining of individual privacy is fundamentally reshaping markets by transferring so much knowledge about user interests, behavior and desires into a few corporate hands. Such information asymmetry is easily converted into economic inequality when one side of every transaction has so much more knowledge about the other during bargaining. Joseph Stiglitz and allied economic thinkers argue increasing information asymmetry feeds increasing economic inequality as well, such that the “result from the new information economics is that issues of efficiency and equity cannot easily be delinked." When information is itself the commodity being sold, companies inevitably "appropriate the returns to creating information for economic advantage in the market place” in ways that creates dynamics towards monopoly control of such markets.[i]
Big data platforms have the economic incentive, pushed by advertisers seeking their own information advantage in marketing to users, to increasingly violate user privacy to appropriate more and more information to solidify its economic dominance, all while making it less economically possible for potential competitors to challenge the company. The fact that many of the largest online advertising customers in the mid-part of the last decade were linked to the subprime mortgage industry is just one indicator that understanding the dynamics of the search advertising sector gives insight into larger theoretical problems of market failure, the harm from predatory firms and why we have seen rising economic inequality and corporate concentration in the economy over recent decades.