Platform End Users as Free 'Data Labor' - Re-Distributing the Value Created in Double Sided Markets

This paper develops the view that the end users (consumer) side of two-way platforms should be considered the free 'data labor' of digital platform firms, producing end products (personalized data) that is sold to the seller side of the platforms. We further argue that digital platform firms are currently monopsonies in their respective data labor markets, and show that such firms can grow infinitely large. Being a monopsony that can grow infinitely large allows digital platform firms to capture the vast majority of the value created in double sided markets. Yet, once digital platform firms will be required to compensate their data labor (end consumers) for the end products they create, a more even distribution of such value can be achieved. First, end users will also get part of the value created in two-way platforms through the compensation they get. Second, nation states will become capable to tax digital platform firms, by attributing the income of such firms to their expenses on data labor compensation, on a per country basis