Synthetic Data, Network Effects, and the Future of Competition

The legal literature has argued that there are potentially economies of scale when companies own large amounts of data. Synthetic data generated by modern generative AI techniques promises to loosen this grip by allowing potential entrants to gain the insights of large datasets without exposing personal information. This is increasingly important with the growing landscape of privacy regulations. We explain how synthetic data can mitigate cold start problems resulting from a lack of data using t