Researcher, Toulouse School of Economics,
Co-Director, Bennett Institute for Public Policy, University of Cambridge,
Managing Economist – Service Leader for Digital Economy, Copenhagen Economics,
Head of Unit "E-Commerce and Online Platforms", European Commission, DG CONNECT,
Professor of Law, University of Liege,
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During the event Diane Coyle presented a report, sponsored by The Jean-Jacques Laffont Digital Chair on the Digital Economy (represented in the panel by Jacques Crémer), on the current state of knowledge about digital platforms as well as relevant issues for research and policy.
After defining digital platforms and describing their basic economic characteristics, her presentation turned to the analysis of the factors which enabled the emergence of digital platforms. Several technological innovations played an essential role in drastically lowering the transaction and matching costs and increasing the benefits of connecting diverse customer groups on a single platform. A fundamental dimension of platform design outlined regards the creation of trust between buyers and sellers and the self-regulatory mechanisms created to establish and guarantee it. She then identified many issues which have remained untackled so far: the implications of zero-price strategies adopted by many platforms; the development of practical competition enforcement tools appropriate to platform-based business models; the reasons behind the lack of European home-grown digital platforms on the scale of Google, Uber, Airbnb or Facebook; the potential and relative constraints to provide services such as transport or traffic management traditionally managed by the public sector.
She concluded that these are only few of the questions and challenges posed by the emergence of digital platforms. An extensive research and policy agenda is needed and has to be developed with extreme urgency given the actual speed of change.
Bruno Basalisco noticed how platforms research is highly disruptive to “incumbent research” but warned against a “one fits all” approach. Digital platforms are indeed extremely diverse in terms of operating sector and business model adopted. As very diverse are the set of extant regulations applicable in the sectors in which digital platforms operate. He then presented some estimates potential economic impact of digital intermediaries in terms of productivity growth and consumer welfare.
Werner Stengg, from DG-CNECT, noted how the emergence of digital platforms accelerated the dynamics within several sectors, adding additional dimensions of complexity. For this reason, more research is certainly needed but also more prudence should be exercised by the policy-makers. In this sense, he argued that the approach adopted by the Commission (with the Collaborative Economy Guidance and the Online Platform Communication) has been extremely balanced, embracing the platform revolution but at the same time proportionately tackling targeted emerging issues.
Nicolas Petit, adding a legal perspective to the debate, presented his latest research on tech giants in which he developed a new hypothesis of “moligopoly” to describe the nature of competition of digital platforms.
Finally, in conference-call from the US, Simon Wilkie highlighted the key role that digital platforms are currently playing and foresaw their increasingly centrality in shaping the Fourth Industrial revolution. Sharing his view on the current challenges for policy-making, he stressed the need for market design approaches to properly face the width of the changes that the economy is undergoing.
Event notes by Filippo Biondi, Research Assistant.
Making the most of platforms: a policy research agenda by Diane Coyle
Presentation by Bruno Basalisco
Technology giants the "moligopoly" hypothesis and holistic competition: a primer by Nicolas Petit