  We analyze digital markets where a monopolist platform uses data to match
multiproduct sellers with heterogeneous consumers who can purchase both on and
off the platform. The platform sells targeted ads to sellers that recommend
their products to consumers and reveals information to consumers about their
values. The revenue-optimal mechanism is a managed advertising campaign that
matches products and preferences efficiently. In equilibrium, sellers offer
higher qualities at lower unit prices on than off the platform.
Privacy-respecting data-governance rules such as organic search results or
federated learning can lead to welfare gains for consumers.
