From Tipping to Trustees: Why Data-Driven Markets Require Institutional Design, Not Optimization

Data-driven markets, where innovation costs decrease with accumulated user information, tip toward durable monopoly even absent predatory conduct. The EU’s Digital Markets Act correctly mandates data sharing by gatekeepers but excludes evolving dominant firms and limits obligations to designated platforms. Voluntary alternatives, such as industry-led data spaces, fail structurally: data-rich incumbents earn monopoly rents from data hoarding and face zero incentive to share genuine insights