Power, Privacy and Personalization in Digital Commerce

This paper reviews emerging issues with respect to market power and user privacy in digital commerce, and implications for the use of personalization by providers of products and services. It argues that advances in various forms of AI, machine learning, and related software tools allow for the effective use of digitally-generated behavioral data, both live and historical, as well as addressing concerns about market power and digital privacy. The contribution of this paper is to integrate the treatment of personalization based on behavioral data with concerns about privacy and market power in digital networks, to illustrate effective solutions to these problems, and bring out the managerial implications of this approach.