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Is there a need for platform neutrality regulation in the EU?

Author

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  • Jan Krämer,
  • Daniel Schnurr,
Abstract
Motivated by the policy discussion in the EU whether to impose non-discrimination obligations for dominant online platforms, we analyse whether such regulation is warranted from an economic point of view. Our contribution is threefold. First, across several platform contexts, we identify (i) (paid) prominence of some third parties over others and (ii) the favouring of a platform's integrated services over independent entities as common discriminatory conducts of online platforms. Second, within this scope, we review the economic literature and find that discrimination in the form of paid prominence may often be in the interest of consumers. However, smaller or low-quality content providers are likely to be worse off, which gives rise to concerns regarding dynamic efficiency and long-term variety in those markets. Additional problems may arise if platform operators are vertically integrated with content providers. Third, based on these theoretical insights, we recommend that EU policy makers should not adopt a neutrality regulation for platforms prematurely. Instead, we recommend to impose new proportionate transparency rules for dominant platforms in order to facilitate the identification of actual misconduct and legal enforcement.

Suggested Citation

  • Jan Krämer, & Daniel Schnurr,, 2018. "Is there a need for platform neutrality regulation in the EU?," Telecommunications Policy, Elsevier, vol. 42(7), pages 514-529.
    • Handle: RePEc:eee:telpol:v:42:y:2018:i:7:p:514-529
    DOI: 10.1016/j.telpol.2018.06.004
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    3. Hui Song, 2021. "Prominence of store-brand products in an electronic platform," Journal of Economics, Springer, vol. 133(1), pages 47-83, June.
    4. Ha, Seungyeon & Park, Yujun & Kim, Jongpyo & Kim, Seongcheol, 2023. "Research trends of digital platforms: A survey of the literature from 2018 to 2021," Telecommunications Policy, Elsevier, vol. 47(8).
    5. Brouwer, Dennis, 2020. "A non-discrimination principle for rankings in app stores," Internet Policy Review: Journal on Internet Regulation, Alexander von Humboldt Institute for Internet and Society (HIIG), Berlin, vol. 9(4), pages 1-27.
    6. Morgane Cure & Matthias Hunold & Reinhold Kesler & Ulrich Laitenberger & Thomas Larrieu, 2022. "Vertical integration of platforms and product prominence," Quantitative Marketing and Economics (QME), Springer, vol. 20(4), pages 353-395, December.
    7. Prasad, Rohit & Sridhar, V, 2024. "The integrated sphere of coopetition of digital services and the regulatory approach of diagonal equity," Telecommunications Policy, Elsevier, vol. 48(3).

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