Strategic Management Review > Vol 4 > Issue 2

Governance Strategy for Digital Platforms: Differentiation through Information Privacy

Jennifer Kuan, College of Business, California State University Monterey Bay, USA, , Gwendolyn Lee, Warrington College of Business, University of Florida, USA,
Suggested Citation
Jennifer Kuan and Gwendolyn Lee (2023), "Governance Strategy for Digital Platforms: Differentiation through Information Privacy", Strategic Management Review: Vol. 4: No. 2, pp 161-191.

Publication Date: 14 Jun 2023
© 2023 now Publishers, Inc.
Competitive strategy,  Corporate strategy,  Strategy process and practice
Digital platformsgovernance strategyinformation economicstransaction cost economicsinformation privacydisinformationFacebook


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In this article:
Digital Platforms 
Theoretical Foundations for Platform Governance 
Facebook and How Digital Platforms Strategically Choose the Level of Quality that Their Users Experience 
Discussion and Conclusion 


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 comes at a time when these firms view the information about their users 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 actions are allowed. We add information privacy as a new dimension of platform governance that affects a platform's quality. 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 presented as a technicalproblem, it is, in fact, a strategic choice.