[Summary]
"Data is the oil of the 21st century."
The phrase has been repeated for years. Yet while crude oil has a market price, the search histories, browsing histories, location data, and purchase histories we create every day do not have an obvious market price.
Users receive enormous benefits from free services such as search, maps, social networks, video, email, and cloud tools. In that sense, it is too crude to describe data provision simply as uncompensated extraction.
The real issue is that the price formation process for the data handed over in exchange for free services is almost invisible from the user's side.
Data itself is often not traded as a standalone commodity. It becomes priceable only after it is converted into material for advertising delivery, recommendations, credit assessment, and behavior prediction: in other words, into a probability of predicting a person's attention.
This chapter reads the price of data in digital space through platform aggregation, real-time bidding in ad tech, and the state's attempt to reconstruct data sovereignty.
This article is a general explanation of data markets, advertising technology, and personal information protection regulation. It does not assert legal violations by any specific company. The legality of personal information protection, cross-border transfer, advertising delivery, consent acquisition, and data use differs depending on jurisdiction, service design, purpose of use, contracts, consent methods, and the latest laws and guidelines.
New Price Formation Theory Series
We live surrounded by many prices: stock prices, hourly wages, interest rates, foreign exchange, and the value of data.
Who decides them, and under what rules?
This series reads modern capitalism through the question of who controls the rules of price formation.
- New Price Formation Theory | Who Decides Prices?
- New Price Formation Theory | Capital Markets: Who Decides Stock Prices?
- New Price Formation Theory | Labor Markets: Who Decides Wages?
- New Price Formation Theory | Financial Markets: Who Decides the Price of Money?
- New Price Formation Theory | Foreign Exchange Markets: Who Decides the Price of the Yen?
- New Price Formation Theory | Data Markets: Who Decides the Price of Data? (this article)
Data as Wealth Without a Visible Price
"Data is the oil of the 21st century."
After more than a decade of hearing this phrase in business and economics, we now experience it in a concrete way.
We scroll on smartphones. We type words into search boxes. We share location data. We watch videos. We shop online. Each action produces new data in digital space.
But that raises a decisive question.
If data is so valuable, how much is it worth per gigabyte?
Oil futures prices are visible in real time. Gold prices, stock prices, exchange rates, and interest rates are visible too.
But a general news terminal does not show a price for "data futures."
Every day, we leave traces of our behavior and thinking in digital space. Yet it is hard to see how that data is valued, what revenue it becomes, and whose capital value it increases.
In Part 1, we examined struggles over price-setting power inside traditional institutions: companies, labor, finance, and the state. There were visible market prices, national laws, and central bank infrastructure.
In Part 2, the stage changes.
We move from a world where institutions decide prices to a world where algorithms estimate value and platforms monetize those estimates.
In a cyberspace where borders and central banks are ambiguous, who decides the price of data, the source of this new wealth, and under what rules?
1. The Largest Black Box In Modern Capitalism
Why does data rarely have a visible market price?
Because the economic characteristics of data are fundamentally different from those of traditional goods.
In conventional economics, price is often easy to explain through the scarcity of finite goods. Oil decreases when used. Land cannot be increased easily. Gold requires mining costs.
Supply and demand arise, and prices form.
Data, however, is non-rivalrous.
If one person uses a piece of data, another person is not prevented from using the same data. It does not deteriorate when copied. It does not disappear like oil when consumed simultaneously.
The harder point is that data rarely has much value on its own.
Location data, search terms, click histories, purchase histories: each is only a fragment. Value emerges when they are accumulated at scale, analyzed, and converted into prediction models, advertising delivery, recommendations, and credit assessment.
Based on this property, large platforms built a highly refined economic system.
Users receive major benefits from free services such as search, maps, social networks, video, email, and cloud tools.
So it is inaccurate to see this transaction only as one-sided uncompensated extraction.
But users can hardly see how much the data they provide in exchange for those benefits is worth, how it becomes revenue, and through what price formation process it passes.
This is the core of the data market.
Data is enclosed and aggregated by platforms without an explicit price being shown to the provider. Open price discovery through market supply and demand barely appears, at least from the user's perspective.
2. Ad Tech As An Invisible Auction House
Does data aggregated by platforms and advertising technology companies really remain without price?
No.
Data is priced at tremendous speed behind algorithms and converted into advertising revenue.
The representative venue is real-time bidding in ad tech.
When you open a website or app, automated bidding for ad inventory takes place in the tiny interval before the screen is displayed.
The UK's Information Commissioner's Office explains real-time bidding as a mechanism in which advertisers compete for available digital advertising space in milliseconds.
What is being traded is not merely an ad slot.
It is a combination of information such as the following.
| Information that matters in bidding | Why it becomes priceable |
|---|---|
| Page being viewed | It helps infer current interest |
| Past browsing history | It helps infer interests, purchase intent, and lifestyle patterns |
| Location and device information | It helps infer region, movement, and usage environment |
| Attributes and comparison with similar users | It improves prediction of ad response and purchase probability |
Platforms and ad-tech algorithms use this information to estimate how much it is worth bidding for this ad slot on this user's screen at this moment.
There, a price such as "yen per impression" is determined in real time.
This is the practical price formation of data.
The key point is that data itself is not necessarily being traded as a standalone commodity.
What is being priced is the probability of predicting an individual's attention.
In other words, what is monetized is not simply "your data" itself, but the accuracy with which a system can predict what you will look at next, what you will respond to, and what you may buy.
Pricing power does not sit on an open market order book.
It is concentrated on the side of platforms and advertising technology companies that control data aggregation, ad delivery infrastructure, algorithms, and auction design.
3. The Return of the State and a New Sovereignty Struggle
Against data concentration that bypasses central bank currency systems and national border checks, the state that competed with markets in the foreign exchange chapter now brings out another weapon.
That weapon is data protection regulation such as GDPR, and platform regulation such as the Digital Markets Act.
The European Commission positions data protection as a fundamental right under EU law and advances personal data protection through legal frameworks including the GDPR. GDPR principles require lawfulness, fairness, transparency, purpose limitation, data minimization, and other standards for personal data processing.
States and regional communities have noticed something important.
The information value created by their people in economic activity can cross borders, accumulate inside particular platforms, and make the rules for monetization, taxation, and supervision ambiguous.
So the state is trying to rebuild a foothold in the price formation process of data through rules on data transfer, consent, purpose of use, transparency, portability, and platform obligations.
The EU Digital Markets Act imposes obligations on large gatekeeper platforms to make digital markets fairer and more contestable. End-user data portability also establishes rights concerning access to data provided or generated by users.
In Japan, guidelines and Q&A from the Personal Information Protection Commission explain rules for providing personal data to third parties in foreign countries, including consent, information provision, and equivalent measures.
This is not only privacy protection.
It is also an attempt by the state to rebuild a wall of sovereignty around borderless wealth called data.
But however wide the regulatory net becomes, transactions in digital space are granular, fast, and cross-border.
Data flows through advertising, search, cloud computing, payments, AI training, security, recommendations, logistics, and finance. Laws are designed by country or region, while data use advances across services.
Here again, state regulation, technological evolution, and platform aggregation constrain one another across a new boundary.
Conclusion: Who Holds Pricing Power In Digital Space?
Who decides the price of data?
The answer is a struggle for control in cyberspace between platforms that control data collection infrastructure and prediction algorithms, and state regulation that tries to surround them with transparency, consent, portability, cross-border transfer rules, and competition rules.
What we saw in the data markets chapter is a transformation of the very concept of price.
Prices are not always presented as visible numbers in open markets, like stock prices or interest rates.
In the world of data, price turns into value hidden behind algorithms and difficult to observe.
| World | Feature of price formation |
|---|---|
| Part 1: Old world | Struggles among markets, states, and central banks over visible numbers such as stock prices, wages, interest rates, and exchange rates |
| Part 2: New world | Struggles between platforms and state sovereignty over invisible value such as data, AI, and algorithms |
The main actor behind price has shifted from traditional market mechanisms to digital algorithms studied by information economics.
And now an ultimate intelligence is trying to stand at the center of the new world: one that absorbs this resource with an opaque price formation process, refines it, and amplifies the wealth of the modern economy.
That intelligence is AI.
If the question in chapter 5 was who decides the price of data, the final question becomes who decides the price of intelligence.
AI learns from vast amounts of data created by others and outputs text, images, code, analysis, and decision support.
Who should decide the price of that intellectual output, and under what rules?
The series now moves to its final chapter, where intelligence itself is priced.
Next: AI And Algorithms
The next chapter examines the output value of artificial intelligence, or the price of intelligence.
In an age when AI produces text, images, code, analysis, investment decision support, and business automation, where does that value belong: users, developers, model providers, data providers, or the state?
Sources
- European Commission, "Data Protection"
- European Commission, "What Data Can We Process And Under Which Conditions?"
- European Commission, "The Digital Markets Act"
- European Commission, "End User Data Portability - Digital Markets Act"
- UK Information Commissioner's Office, "Update Report Into Adtech And Real Time Bidding"
- Personal Information Protection Commission Japan, "Guidelines On The Act On The Protection Of Personal Information: Provision To A Third Party In A Foreign Country"
- Personal Information Protection Commission Japan, "Q&A On Guidelines For The Act On The Protection Of Personal Information"
- This site, "New Price Formation Theory | Foreign Exchange Markets: Who Decides the Price of the Yen?"
- Checked on: 2026-06-02