Governance Strategy for Digital Platforms: Differentiation through Information Privacy

Digital platforms are organized by some of the world’s largest firms to serve multiple inter- connected markets. Facebook is a giant firm that organizes a marketplace, and we use it as an example to illustrate why information privacy should be analyzed as a major dimension of platform governance. This review essay comes at a time when these firms view the information about the users of the firms’ products and services as a treasure trove to be exploited. Information privacy, however, is currently not in the definition of platform governance, which has been concerned with who has access to the platform and what interactions among different sides of a platform are allowed. We add information privacy as a new dimension of platform governance, and posit that a platform chooses a quality position through its policy on information privacy. For social media, quality refers to the discourse and veracity of the information exchanged on the platform, and the level of quality hinges on what user data a platform chooses to disclose or conceal. Thus, platforms differentiate on quality through information privacy. One implication for strategists and policymakers is that, while information privacy has been posed as a technical problem, we submit that it is a strategic choice. Keywords: