This paper – which can be found here – is not strictly about competition, but has a wider regulatory focus. Its main arguments are that: (i) the term ‘platform power’ fails to reflect the potentially problematic power at the heart of the information society. Focus should therefore shift from this concept to the identification of concerns raised by the practices of Internet intermediaries; (ii) blind spots exist when the issue of ‘platform power’ is viewed solely through an economic lens. As a result, competition law fails to capture and sanction practices that negatively impact upon non-economic parameters, such as freedom of expression and privacy.
The argument about platform power is made out in Section 2, and it is broken down into three different elements:
- The initial focus of the argument is on the EU’s attempts to address developments in the digital sphere, and in particular on the European Commission’s Digital Market strategy. The various meanings given in Europe to “platforms” are reviewed, and it is found that ‘Platform’ is a contested and open-ended term. Given its fluidity, the concept of ‘Platform’ is an inappropriate target for regulation. As such, the paper suggests that it would be preferable to identify problematic practices that may require regulation rather than to focus on ‘platform power’: “although imperfect, a functional rather than a formalistic approach is preferred when identifying the targets of regulation”.
- ‘Power’ has been interpreted as a synonym to “market power”, to the exclusion of other types of power. However, traditional competition law concepts may be unsuited for the information economy. In particular, it is argued that the concept of market power is too narrow: “Intuitively, individuals and regulators may sense that a digital company has ‘power’ even when market power is not present.”
- In short, focusing on “platform power” and competition law is mistaken in this context. While competition law can intervene against practices with overall net negative impact on ‘consumer welfare’, actions by platforms that control access to infrastructure and users, and are therefore in a ‘pivotal position’, may also have implications for individuals that are not captured by competition analysis. These platforms perform the role of ‘gatekeepers’ e. “non-state actors that have the capacity to alter the behaviour of others in circumstances where the state has limited capacity to do the same”. Gatekeeper power is therefore distinct from market power in terms of how it should be measured and of its potential impact on the rights and interests of individuals. The basic argument here is that focusing on “gatekeeper” power entails a shift from an entirely structural approach (focusing on platforms because they are multi-sided or digital, for instance) to an approach that also encompasses functional aspects (focusing on gatekeepers because of their role in controlling the flow and accessibility of information and structuring the digital environment).
Section 3 then tries to provide some guidance as to how to regulate digital “gatekeepers”. It starts by noticing that “we do not yet have coherent methods to identify or describe systemic threats in the information society”. Bearing this in mind, this section tries to argue that digital gatekeepers pose a series of concerns which “fall into a blind spot when the activities of gatekeepers are viewed solely through the lens of neoclassical economic theory.” This is done by reference by two sets of concerns regarding digital gatekeepers:
- Concerns regarding access to and presentation of content and services – In a digital world, gatekeepers have primary responsibility for enabling or disabling our access to and dissemination of information, as well as for determining the terms on which this access and dissemination occurs. Even when these are regulated through State laws, the State often enlists the help of a gatekeeper in order to police and enforce them. This can have implications on personal (and fundamental) rights which competition law, with its economic focus, is not well suited to deal with.
- Concerns regarding data processing and profiling – These concerns are, essentially, that “the strategic role of gatekeepers in the personal data processing ecosystem can have detrimental effects on individuals that are not captured by data protection law”. This includes the ability of gatekeepers to profile users of their platforms, and in this way make individuals legible to gatekeepers; the creation of personal filters that consolidate and reinforce existing prejudices and preferences; the ability to discriminate between and manipulate individuals; etc. A related concern is that the increase in personal data processing driven by the digitisation of data has left individuals without control over their personal data.
In conclusion, the author considers that: “Competition experts have suggested that there is ‘no need to discard the competition playbook simply because platforms in the digital economy operate ‘online’’. However, it would appear that the key attribute of gatekeepers is not ‘being digital’; it is their power. Nevertheless, key questions remain to be answered regarding this power: is it the nature or degree of the power that is problematic, or is the way it is related to other configurations and forms of power? Once we have a better understanding of this power of gatekeepers, we must then consider whether this increasing power is sufficient, in and of itself, to warrant their regulation.”
The paper is in line with a very interesting paper by Julie Cohen that I reviewed here, which argued that antitrust (and the overall regulatory framework) should be extensively rethought for the information age. Even though I am actually quite sympathetic to this thesis, I’m not sure I agree with how it is applied here. For example, the paper seems to start from an implicit premise that competition law is the main regulatory framework applicable to digital activities (or that it provides a benchmark for whether some conducts by digital intermediaries should be regulated). I don’t really know of anyone who shares the starting assumption, which asks too much of competition law. Similarly, the author holds that competition law is unable to fully regulate the activities of digital platforms, and that competition law’s economic focus makes it unable to tackle non-economic issues created by digital problems. This is obviously correct, but it begs the question of why competition law should do any of these things in the first place. On the other hand, if the goal is merely to demonstrate that there are non-competitive concerns that also merit regulation (or, in the author’s own words, “viewing the functioning of internet gatekeepers through a purely economic lens, concerns pertaining to individual rights will be caught in the blind spot”), this then begs the question of how to regulate such concerns.
Ultimately, I think a paper with goals as ambitious as this one require a more structured, in-depth approach. Such a paper would have to look at various regulatory areas relevant to the digital economy, and try to determine: (i) what are the problems that need to be addressed? (ii) how are we to design rules that address these problems?Such an effort involves identifying criteria for determining what is “problematic” (which must go beyond “Ultimately, the threshold for regulatory intervention will be a high one”); and then turn those criteria into workable rules and standards. This can be done without needing to choose between “formalist” and “functionalist” theories, or, for that matter, without focusing on “platforms” or “digital players” at all. The challenge, as Cohen put in his paper, is update a regulatory structure developed for a different world – work that is beyond the scope of a research paper. A good topic for a more modest (and yet still very ambitious) paper, however, would be to determine what role competition law can have in this new regulatory framework.