Entries Matching: Platform Regulation Series
In my last blog post, I explained my working definition for what constitutes a “digital platform.” Today, I focus on another concept that gets thrown around a lot: “dominant.” While many regulations promoting consumer protection and competition apply throughout a sector, some economic regulations apply to “dominant” firms or firms with “market power.” Behavior that is harmless, or potentially even positive when done by smaller companies or in a more competitive marketplace, can be anticompetitive or harmful to consumers when done by dominant firms -- regardless of the firm’s actual intent.
In Part I, I explored the challenges of regulating digital platforms to promote competition, protect consumers, and encourage news production and civic engagement. Today, I plan to dive into the first set of challenges. First, I define what I mean when I talk about digital platforms. I will argue that platforms that (a) provide a two-sided or multi-sided market; (b) are accessed via the internet; and (c) have at least one side that is marketed as a “mass market” service, share a set of characteristics and raise a similar set of concerns so that we should consider them as a distinct set of businesses.
As digital platforms have become increasingly important in our everyday lives, we’ve recognized that the need for some sort of regulatory oversight increases. In the past, we’ve talked about this in the context of privacy and what general sorts of due process rights dominant platforms owe their customers. Today, we make it clear that we have reached the point where we need sector-specific regulation focused on online digital platforms, not just application of existing antitrust or existing consumer protection laws. When platforms have become so central to our lives that a change in algorithm can dramatically crash third-party businesses, when social media plays such an important role in our lives that entire businesses exist to pump up your follower numbers, and when a multi-billion dollar industry exists for the sole purpose of helping businesses game search engine rankings, lawmakers need to stop talking hopefully about self-regulation and start putting in place enforceable rights to protect the public interest.