Business Model Transparency: do you care how digital platforms use your data?

Digital services have the opportunity to transform billion of interactions into a valuable asset that can be leveraged in several ways, unveiling new opportunities in terms of business models. In the digital era, data is often described as the new oil. Just as with oil, the value contained within data is universally recognized. The diffusion of data-driven business models is increasing, giving birth to an apparent paradox. Recent literature points out how the chance to gather a considerable amount and variety of user-generated data may lead to different innovation opportunities, exploiting their value. Nevertheless, users are often unaware of the usage that companies do on their data and more and more concerned about privacy issues. This research aims to explore this apparent paradox aiming to understand the role that business model transparency plays in the decision making process to use a digital service. It leverages theories from the behavioral economics field (the rational choice theory and the theory of inequity aversion) to build a research model tested through a field experiment. The mockups of two digital services have been designed, manipulating the transparency of the business model. Results show the perception of fairness may influence the willingness to use a digital service. In other words, once users understand the possible existence of a fairer relationship based on the clear communication on how companies use the gathered data, the more their decision making process is influenced by the perceived transparency. Results open up interesting space for discussions on business model design.