In the contemporary era of digital growth, our lives are intricately relying on online platforms because of the connectivity and other facilities they offer. Mansell and Steinmueller (2020) have termed the proliferation of online platforms and their implementation in creating a new economy where people have authority over their assets as a “sharing economy.” Moreover, Figure 1 shows that the transition from retail purchasing to e-commerce purchasing have shown that the growth is 20.8% with total revenue of $6.3 trillion and it will be 24% by 2026 with over $8.1 trillion (Baluch, 2023). This essay investigates the importance of the sharing economy of digital platforms and its impacts on user privacy. The essay argues that digital platforms are addressing the growth of the sharing economy and its profound implications are imposing threats to the users’ privacy in the data-driven world. The essay will also explore the importance of the news media bargaining code and other facilities that influence the sharing economy in the digital environment.
Figure 1: Transition of social media use
Source: (Baluch, 2023)
Rise of digital platforms as the dawn of the sharing economy:
The current scenario of the sharing economy through its attributes of sharing information to a digital interaction has influenced the economy of digital platforms. According to Miège (2019), economy resembles the technology and here, the political economy of the sharing economy has gone through profound mutations backed by globalisation to accelerate the transmission of information and communication. It infers the globalistaion in media has revolutised the rise of sharing economy by establishing the social media platforms as the initiator for social capital transaction. For example, when we purchase something online and pay online, this exchange of money will not be confined to a particular domain and it can occur for international brands. Hence, the emergence of digital technology is bringing opportunities for brands to exploit the economic power of social media. However, a report by Business Wire has asserted that e-commerce has grown to 1.5% in 2022 and the UK has faced major fraudulent activities from 1.5% to 4% (Business Wire, 2023). The spike in fraudulent activities on e-commerce platforms has created concern regarding the privacy of the users by big corporations. Its connection with the shared economy lies in the intersection of how e-commerce platforms are gathering users’ private information and the example of scams in the UK’s e-commerce industry introduces a new concern about user privacy. Hence, the juxtaposition of digital advancement and the sharing economy has the potential to impose immense threats on the users.
The Gym Model: An aspect of the sharing economy:
Figure 2: Multi-sided The Gym Model
Source: (Torregrossa, 2018)
Figure 2 depicts the multi-sided gym model that can explain the importance of the sharing economy by referencing the business model of the gym and it can be applied in the modern e-commerce platforms. The report of the Australian Competition & Consumer Commission (ACCC) suggests the market power of Google and Facebook for high monetary price for supply and offering the audience a new referral service (ACCC, 2019). Now, applying The Gym Model to the market power of Facebook and Google, here, the supplier is the digital platforms, the gym can be considered as the brand and its offerings such as products/services the gym trainers followed by the users as the customers. The suppliers, Facebook and Google are providing the user data collected from their search engine history to the brands to cater to the users. Here, ‘trainers’ can be tagged as the product/service that provides a direction to the audience and their attributes become a significant contributor to the audiences’ purchase decision. The digital platforms act as an agency and focus on four elements, content, connectivity, creativity, and commerce the media industries produce content and use social media channels to connect the audience through creativity and they invest a certain amount for commercialising their content for better marketing opportunities (Nicholas, 2016). Therefore, the sharing economy has been a prominent part of digitalisation whereas the e-commerce platforms are empowering both the brands and the audiences to be an effective part of the shared economy. But this shared economy is harmful for the privacy of the user because the collaborative consumption as an integral aspect of the sharing economy has imposed the importance of technology from a metaphorical view through a specific form of network consumption (Nicholas, 2016). Hence, the connection between the platforms and the audience plays a significant role in the sharing economy where brands get economic power by the collaborative attitude of peers.
The current scenario of user privacy:
Data is the new fuel of the economy and has been a motivation for commodifying user data from social networking sites. Martin (2019) argued that social media companies use a strategy to provide ‘free’ services by providing them relentless activities from administration to communication in exchange for the rights to collect and analyse their personal data and republish their data for benefit brands in exchange for monetisation. From the agenda of the sharing economy, this ideation of sharing users’ data might be justified, however, re-using the users’ personal information such as search history, address, or other details is bringing detrimental effects on the users. Yet, Dijck (2018) highlights the importance of a ‘platform ecosystem’ where the first level is known as Infrastructural platforms (Apple, Microsoft, Meta, Amazon, and Alphabet) that operate many other applications and websites by providing adequate data or access to them for accessing users’ data (Figure 3). Here, through the shared economy of digital platforms are empowering brands to foster their communication efforts with the audience and simultaneously negatively affecting the users’ privacy. Its relevancy can be found in a report by The New York Times wherein 2023, Meta was accused of violating the European data protection rules whereas the fine was 1.2 billion euros (Satariano, 2023). This infers the lack in the safety of the users’ personal data. Here, the surveillance of the platformed society to increase the sharing economy through social media platforms is becoming a threat to mankind whereas a long list of terms and conditions is not sufficient to address the issues.
Figure 3: Infrastructural Platforms
Source: (Dijck, 2018)
The sharing economy approach in digital platforms is shaping the social activities of the users. Gillespie (2018) has portrayed that contemporary social media platforms are not the ‘content producers’, rather they focus on creating assigned and orchestrated environment where the social activities occurring on those platforms are highly influenced by the structure it provides. It infers that the sharing economy model is based on one-way flow of the power dynamics and its power is confined within the periphery of the design of digital platforms. However, de Kloet et al. (2019) have argued that the “datafication” and “commodification” of digital platforms are skilfully maintaining a social relationship by establishing themselves as the vehicles of participatory society and sharing economy by collecting algorithmically processing, sharing, and selling user data. A YouTube video by CNN Business (Figure 4) has assured that how Facebook is making billions of dollars by exploiting user data (CNN Business, 2018). Hence, the sharing economy with the proliferation of digital technology has created an unhealthy environment for users who are restricted by the designs of social media platforms to protect their personal data.
Figure 4: YouTube video about data selling by Meta
Source: (CNN Business, 2018)
The essay argued that digital platforms are addressing the growth of the sharing economy and its profound implications are imposing threats to the users’ privacy in the data-driven world. With the juxtaposition of digital advancement and the sharing economy concept, fraudulent activities are rising on social media platforms. Through this approach the brands get exposure to the user data to utilise it as their business advantage. Here, the collection of user data and reusing them unethically impose threats to user privacy and several instances like Meta’s violation of data regulation support the claim. Moreover, the commodification of data is bringing detrimental effects on user privacy by selling their data. In conclusion, the sharing economy model is a risk factor that compromises user data to gain economic power by exploiting data.
ACCC. (2019). Digital Platforms Inquiry. https://www.accc.gov.au/system/files/Digital%20platforms%20inquiry%20-%20final%20report.pdf
Baluch, A. (2023). 38 E-Commerce Statistics Of 2023. Forbes. https://www.forbes.com/advisor/business/ecommerce-statistics/
Business Wire. (2023). New digital fraud statistics: forced verification and deepfake cases multiply at alarming rates in the UK and continental Europe. https://www.businesswire.com/news/home/20230530005196/en/New-digital-fraud-statistics-forced-verification-and-deepfake-cases-multiply-at-alarming-rates-in-the-UK-and-continental-Europe
CNN Business. (2018). How your data makes Facebook billions. YouTube. https://www.youtube.com/watch?v=vyRsarL-dqk
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Satariano, A. (2023). Meta Fined $1.3 Billion for Violating E.U. Data Privacy Rules. The New York Times. https://www.nytimes.com/2023/05/22/business/meta-facebook-eu-privacy-fine.html
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