(Previous installments here)
Finally, and more generally, it would be unreasonable to turn a blind
eye to the fact that the economic value extracted from consumers’ personal data is
essential to many Internet entrepreneurs. Safeguarding competition in an era of
big data requires a detailed understanding of how exactly user information fits
into these firms’ business models.
What OTAs and PCWs have in common is that they are all platforms
for finding and acquiring services, i.e. they intermediate between, respectively, hotels and insurers on the one
side and travellers and insurance seekers on the other. Broadly speaking, OTAs and PCWs follow a business model akin to traditional
advertising-supported media. Content, here comparative info about hotels and PMI
policies, is used to attract consumers. Commercial access to those consumers is
sold to hotels and insurers on a “click through” basis.
However, while OTAs and PCWs gain direct revenue from the
intermediation services they provide, they are also able to collect data about
users and by that enhance their value to hotels, insurers, as well as to other market participants (e.g., data brokers) and this even when consumers do not “click through” and finalize their purchases. Not only data about individual users are
important, but also the cumulative data of “similar” users in order to “guess” preferences
and anticipate trends. Presumably, the self-reinforcing data advantage is not
much less important than the occurrence of indirect network effects referred to in the German decision in
explaining the mechanics of online platform competition.
(To be continued)
