Data Commodification and Regulation in the Tech Sector: A Topic Modeling Approach

• In Event: Governance, Markets, and Innovation

Abstract

Personal data are of increasing importance to digital technology firms, though the origins and extent of data commodification across the sector are unclear. In principle, Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) disallow the inclusion of data as a reported firm asset. Nonetheless, commodification practices around personal data abound and have been documented extensively. In our paper, we propose the use of a Keyword Assisted Topic Model to indicate perceptions of data as a form of risk in corporate disclosures by digital technology firms as reported in earning calls between 2005 and 2024. By uncovering how and when data was characterized by firms in the sector as a type of financial risk, we seek to find the origins and the prevalence of data commodification across the digital technology sector. Such deliberation and assessment of data as financial risk would indicate intentional consideration of data as commodities outside of existing codified legal and regulatory frameworks of GAAP and IFRS. Data are “riskified” and financialized without becoming a legally accountable asset. We believe findings of regulator and investor perceptions of personal data commodification in the production of knowledge surrounding corporate risk may give insights into the political strategies and actions by firms in the digital technology sector to evade and minimize regulatory scrutiny over data commodification.

Authors

• Besnik Pula, Virginia Polytechnic Institute and State University

• Andrew Alexander, Virginia Tech