In digital markets, the essential functions of property turn against each other. Common law property divides the world into mine, yours, and others’ by excluding non-owners. This exclusion strategy generally serves three essential functions in economic ordering: internalizing externalities by channeling positive and negative effects on third parties back to the owner; creating modularity by dividing the world into manageable chunks; and promoting liberty by enabling private control over resources. These functions usually work in harmony. As this Article shows, not so in the digital platform economy.
Digital networks create enormous value by facilitating communication, transactions, and knowledge production—value that grows exponentially as more people participate. Through property-like entitlements, law enables platforms like Amazon, Google, and Facebook to exclude others from these networks and thereby capture that exponential value. This legal architecture encloses digital networks just as law once enclosed common meadows. The resulting control over digital networks disproportionately benefits incumbents. Paradoxically, this Article argues, property’s internalization function captures value so effectively that it fuels industrial concentration. Rather than creating modularity, this concentration amplifies systemic complexity and interdependence; instead of promoting liberty, it entrenches economic dependence, centralizes control, and breeds oligarchy.
This Article reveals property design as a central and underappreciated driver of platform dominance, one amenable to legal correction. While scholarly and policy responses to economic concentration have largely emphasized antitrust enforcement and sector-specific regulation, this Article foregrounds the upstream design of property entitlements. The Article challenges the classical prescription that property should maximize internalization of externalities. When platforms internalize network effects under that logic, the result is industrial concentration with deep structural harms to modularity and liberty. Reconciling property’s essential functions thus requires curtailing property-like entitlements, expanding the digital commons, and recalibrating the remaining protections.