Platform Types and Regulatory Concerns in European ICT Markets
Year: 2010
Type: preprint
Abstract: Electronic communications are increasingly characterised by technical and product modularity. It is becoming accepted knowledge that in such a context, platforms arise as central components that enable their owners to operate as gatekeepers of information and value flows see e.g. Gawer, 2009). The emergence of these so-called multi-sided platforms implies that policy makers and regulators should not take for granted that simply allowing and facilitating the convergence between IT, internet, telecommunications and media services and technologies will result in an unbundled, open marketplace in which competition will flourish (Ballon, 2009a). Rather, the bottleneck function of platforms may trigger serious regulatory concerns, and may prove to be harder to delineate and to regulate than bottlenecks in the current access operator market. On the other hand, the specific nature of platforms implies that many traditional suspicions against firms setting non-cost oriented prices, introducing cross-subsidies and engaging in collaborations to set a de facto industry standard, lose (some of) their validity in a multi-sided market context (Poel et al, 2007; Wright, 2004). There are other challenges for regulators. Increasingly, platforms originating in entirely different sectors compete directly against each other. This paper argues that the aim of not putting one particular class of competing platforms at a disadvantage, is likely to lead to a certain regulatory convergence, in the sense that access operators may be regulated more lightly, and other platforms more heavily. This means that platform activities should be considered and appraised according to their business model within the converged ICT landscape, instead of according to the specific activities performed within an isolated relevant market. To this end, we identify different types of platform business models in ICT markets. These platform business models differ primarily as to the control and value logic embedded in them. The final objective of this paper is to explore how such aspects could be taken on board by the regulation of electronic communications and ICT markets in Europe. The outline of this paper is as follows. First, the concept of platforms arising around gatekeeper roles, is introduced. Second, it is argued that ICT markets are particular platform markets in the sense that there are different types of platforms employing different business models. Third, a typology of platforms is proposed, based on the platform owner’s business model. Fourth, a short introduction is given into EU policy concerns over platforms. Fifth, potential regulatory concerns for specific platform types are explored. Finally, a number of potential regulatory tools for intervention are outlined.
Source: SSRN Electronic Journal
Authors: Pieter Ballon, Eric Van Heesvelde
Institution: Vrije Universiteit Brussel
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2289169415