Platforms - growth and policy

Online platforms have grown rapidly as a means of matching market participants and facilitating transactions. Their growth and comparative success reflect the preferences of participants for multisided online platform markets in competition with alternative forms of market organisation and governance – online platforms have grown because they benefit users.

Platforms were enabled by connectivity, mobile devices and the low entry barriers to developing and distributing apps. They offer advantages over conventional business models and regulation in terms of discovery and matching in markets characterised by abundance and in providing effective market governance to participants – online platforms reduce information asymmetries.

To realise the full potential of online platforms, policymakers should first seek to do no harm. While platforms have created some harms alongside benefits, the challenge is to address these in an evidence- based, targeted and proportionate manner in order to preserve their substantial benefits while mitigating those harms.

Policymakers should also remove unnecessary regulatory barriers to the development of online platforms, taking account of the market governance that platforms themselves provide. Not only would this benefit users directly, it would also increase competition in the economy as a whole as online platforms provide a competitive challenge to existing businesses, including in areas that previously saw limited competition. 

Brian Williamson considers these issues in an article for InternMEDIA

Platforms – making markets work

How platform market governance evolves to sustain a healthy market

In this paper for Apple, Brian Williamson considers how online platforms govern their community or multi-sided market place to promote trust and benefits for all users including business users, consumers and peer-to-peer participants. Platforms compete to offer governance aligned with users’ needs and are of necessity rule-makers who provide governance for participants. The growth of online markets in competition with alternative forms of market organisation, OECD consumer survey evidence and outcomes in platform markets point to alignment of incentives between platforms and participants. 

When contemplating the application of existing consumer protection and other regulation to platforms, consideration should therefore be given to the regulatory function that platforms themselves are undertaking, and the potential interaction between the two forms of governance. For example, ill-conceived regulation related to ‘fairness’ for business users could undermine the balancing act and ongoing evolution critical to the success of platforms. Doing so could result in consumer harm, in turn harming the interests of businesses participating in platform marketplaces and resulting in further consumer harm. 

Governments have a legitimate interest in outcomes in relation to online platform markets, but the best means of achieving good outcomes should be assessed mindful of the market governance role platforms play, the reasons they have proved successful and the limitations and potential unintended consequences of regulation

Plurality and the Future of PSBs

Robin Foster has authored a short paper on the role and importance of plurality in public service broadcasting.

You can download the paper here.

Plurality in a Digital Age

Robin Foster has presented a paper on 'media plurality in a digital age' at an event organised by the Broadcasting Authority of Ireland.

Plurality Regulations – Still a Wise Market Intervention?

This paper, building on an earlier paper by Robert Kenny submitted to the Leveson Inquiry, considers the costs and benefits of plurality regulation, and looks at how market developments are eroding the net benefit of that regulation.

The paper has been published in Competition Policy International (paywall). A pre-publication draft is also available.