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This paper explores the purchase and usefulness of the notion of digital literacy. Comparing and contrasting theoretical formulations of digital literacy from the “top-down” and “bottom-up”, it reviews how the concept has been used across three research fields in Europe and Australia. An introductory section situates the ways in which digital literacy offers itself as a mean of empowerment in the tradition of the “new literacy studies” but at the same time exposes contradictions in terms of access and power. The first domain explored is media discourse, and this section of the paper examines ideas which have been circulating in Australia since the early 1990s about the need for children to become digitally literate. The second section examines how the concept of digital literacy has developed over the last decade in the domain of school policy, curriculum documents and practices in Norway; and the third section reviews transnational research to explore how the term digital literacy is used in the domain of children's and youth's out-of-school cultural digital practices. We argue that the term “digital literacy” incorporates more notions of exclusion and division than is commonly supposed, and that it exposes the contradictory politics of literacy education in new and provocative ways. [ABSTRACT FROM AUTHOR]