Digital Platforms as Public Utilities
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Digital Platforms as Public Utilities Vicente Bagnoli
Published online: 17 September 2020 Ó Max Planck Institute for Innovation and Competition, Munich 2020
The rise of digital platforms and the relevance they have in the structure of the market have resulted in a novel significance that goes beyond their being mere ‘‘facilitators’’ or ‘‘intermediaries’’, becoming an actual essential facility, which could define the role of digital platforms as public utilities. Platforms in the digital economy (or two-sided markets and even multi-sided markets) have been increasing enormously in number and relevance for the interaction of different groups of customers, such as consumers or users of the services provided by the platform, advertisers who display advertisements to consumers on the platform, and content creators, such as news outlets. The speed and extent of growth in the digital economy has been crucial in making digital platforms one of the most significant, demanding and investigative challenges faced by regulators and competition authorities around the world. These platforms disintermediate the so-called ordinary markets to connect users directly, thus making these markets even more intricately multi-sided. This has led to a wielding of massive control over commerce, communications and public speech. The widespread and frequent use of digital platforms throughout the world demonstrates that their innovative and popular services offered to customers have transformed the way users communicate with each other, access news and information, and interact with other groups of customers or individuals. But the impact of digital platforms on competition and consequently on society warrants a careful analysis. If on the one hand digital platforms can offer substantial benefits to consumers and businesses, on the other hand they act as global super-platforms whose rapid Vicente Bagnoli is Professor of Law at Mackenzie Presbyterian University, Sa˜o Paulo; visiting researcher (2015) Post Doc at the Max Planck Institute for Innovation and Competition, Munich; and Director of the ASCOLA chapter Brazil. V. Bagnoli (&) Professor of Law at Mackenzie Presbyterian University, Sa˜o Paulo, Brazil e-mail: [email protected]
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rise to dominance is related to network effects, high switching costs and an extraordinary ability to extract, control and analyze data. Their functioning as gateways or even gatekeepers indicates that they are essential facilities. What makes digital platforms so unique is Big Data, the use of which promotes a feedback loop, allowing companies to create products and offer services that will attract current as well as new customers. This assures substantial economies of scale and drives the market in favor of the already dominant platforms, who not only take part in a myriad of businesses such smartphones, e-commerce and digital payments, but also are suspects of involvement in the infringement of data privacy, misinformation, labor issues and election interference. The major advant
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