Quarterly Report – Dimension 3: The Consequences of Power
The Observatory team has recently published a quarterly report on Dimension 3: The Consequences of Power. The report analyses the consequences of the platforms’ power in the online platform economy based on a literature review and the results of the survey of businesses using online platforms to sell or advertise products and/or services. In this article, we present the main findings of the report.
End-users’ concerns when using online platforms
What is platform work?
Platform work can be described as labour that relies on online platforms to connect, operate, or deliver services (Eurofound, 2021).
An estimated 28.3 million people are working through platforms in the EU-27, with most platform workers working online (79%). Workers on delivery (e.g., Delivery, Uber Eats, etc.) and transportation (e.g., Bolt, Uber, etc.) platforms are the most visible platform workers in society at large. This is reflected in the data which shows that these workers represent over half of all low-skilled on-location platform workers. The rest typically carries out support, home, childcare, and other on-demand services. Furthermore, platform work provides secondary or marginal employment for most low-skilled on-location workers (48% and 27% respectively).
Over the past two decades, digital transformation has reshaped society and, while it provided numerous benefits, it has also been a major source of concern for policymakers and citizens alike. For instance, the main concerns relate to cyber-attacks and cybercrime, such as theft or abuse of personal data, ransomware (malicious software) or phishing (56%). This reflects the fact that, despite a growing reliance on digital tools, people don’t feel sufficiently protected when using them.
Areas of minor concern include environmental impact and difficulties associated with learning new digital skills.
Trust in social media
The proliferation of online news media and social media has rapidly diversified the sources of news and information to which people have access. Considering the high instance of doubtful information seen online, trust in social media news sits at only 21%. Despite this, Eurostat data (2021) shows that only a quarter of individuals checks the truthfulness of the information or content they find on internet news sites or social media.
Consequences of platforms’ market power
Platform transparency and volatility
The report also highlights the consequences of platforms’ market power from the perspective of businesses using such platforms to sell or advertise.
Results disaggregated by platform type show that businesses using online travel agencies claim to have had issues more often than businesses using other platform types (34%). This is followed by businesses using e-commerce platforms (25%) and collaborative economy platforms (21%). For most businesses, these problems occurred at least twice per year.
Furthermore, most companies consider that reviews received on online platforms have a significant impact on sales. Also, most companies claim to be aware of how online platforms use and collect the company data. Additionally, the majority of companies are not able to transfer key commercial data from one online platform to another.
Companies were also asked whether they encountered any obstacles when trying to access the data produced by the platform. According to businesses, the main obstacles are that only partial data was shared (57%), the data shared did not match businesses’ needs (44%) or data portability was not allowed (41%). Only a few businesses said that platforms refused to share any data (16%).
An overwhelming majority of businesses surveyed were unaware of or had no experience with the P2B Regulation (91%). Moreover, only 7% of businesses think that the enforcement system in their respective countries is working well.