Essential Platform Infrastructure and the Need for Regulation

Abstract

Digital platforms have become a ubiquitous phenomenon and sparked innovation in various industries. However, digital platforms have also raised concerns about competition, privacy, labor protection, democracy, and negative externalities. This is why platform regulation has gained significant attention from research and practice in recent years. Regulators face the challenge of predicting the importance of a new platform of investigation with limited resources and a growing platform economy. To address this challenge, we develop a framework building on infrastructural properties, platform properties, and the notion of essentiality. We derive the concept of essential platform infrastructure to determine the need for regulation. We propose that the degree of essentiality of a digital platform and its appropriation of infrastructural properties are two dimensions indicating the magnitude of potential damage that a platform can cause in case it abuses its power, thereby indicating an increased need for regulation.