AbstractWhat do regulations in the developing world tell us about the internet economy? In this paper, we argue that the ways in which developing nation states adjust to and legislate the internet depends upon whether they possess a national planning strategy for international data traffic. Focusing our attention on the global trade of intangible goods in Iran, we aim to demonstrate that digital protectionism causes, to varying degrees, suppression, censorship, and the violation of freedom of speech and other civil rights on the internet. Our results show that digital protectionism generated an emergence of domestic start-ups, with companies, such as Facenema and Soroush, operating in the Iranian market in the absence of global rivals such as Facebook and WhatsApp. Yet, digital protectionism and sanction-induced barriers have triggered social problems, besides the emergence of parastatals, securing the economy to an inefficient social and economic path towards digital development.

It is widely argued that applications on the internet, especially the software on which the Web 2.0 platforms perform, cause transaction costs to diminish and help such platforms provide their services for free. In this paper, we challenge this argument. We claim that there is no causation between the diminishing transaction costs and the free supply of online services. Focusing our attention on Spotify, we argue that a new economy of data extraction, which we call Commodification 2.0, favors giant internet corporations in such a way that they appropriate the value that online users collaboratively produce. Music artists, however, are either underpaid or not paid at all.

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