How online marketplaces use data to shape competition
Online marketplaces such as Amazon, Google, and other digital platforms collect large amounts of information about customer searches, clicks, purchases, and seller performance. Many platforms now offer this information to sellers through paid data services, often called competitive intelligence services. These tools can help sellers better understand customer demand, track competitors, and make more informed pricing decisions.
This research, recently published in Production and Operations Management, studies an important question: when should an online marketplace share this type of information with sellers, and should it be shared equally with everyone?
Together with my co-authors, I examine a marketplace with two competing sellers. One seller has a larger potential market, while the other has a smaller one. Both sellers are initially uncertain about customer demand and must decide how to price their products. The platform has an advantage because it can observe sales information from both sellers, while each seller typically sees only its own sales. By offering a paid intelligence service, the platform can decide whether to share its broader market knowledge with both sellers, only one seller, or no one.
Our findings show that there is no one-size-fits-all answer. When demand is highly uncertain, it can be beneficial for the platform to share information with both sellers. In this case, better information helps sellers avoid poor pricing decisions, improves marketplace performance, and can benefit the overall platform.
However, when demand is less uncertain, the platform may prefer to share information only with the seller that already has the larger market. Surprisingly, this can increase profits not only for the platform, but also for both sellers. This happens because the better-informed seller may adjust prices in a way that makes it harder for the competitor to learn from market signals. As a result, both sellers may end up charging higher prices.
This finding has an important downside: what is good for the platform and sellers is not always good for consumers. When information is shared unevenly, prices may rise, and customers may be worse off. The study therefore has direct implications for managers designing data-sharing services and for policymakers concerned about fairness, competition, and consumer protection in digital marketplaces.
Overall, this research highlights the growing power of marketplace data. It shows that how platforms share information can shape competition, influence seller success, and affect the prices consumers pay.
Gummus, M., Jaberi, S., Nikoofal, M., Bilgic, T., & Nalca, A. (2026). The impact of competitive intelligence services on online marketplaces (external link, opens in new window) . Production and Operations Management, DOI: 10.1177/10591478261460120.