Over the past decade, online platforms have established their presence as important economic players, connecting economic actors and boosting efficiency, as well as spurring innovation and the development of new business models. Online platforms play an important role in many industries, allowing buyers and sellers of goods and services to trade and communicate with each other. At the same time, they also create network effects, and raise new issues relating to fairness, transparency and market distortions.
The economic significance of platforms can be assessed quantitatively, taking in several major areas of interest: revenues and traffic share (including sectoral disturbance), and trade flows. We examined this dimension by type of user (platforms, business and end users); by sector (hospitality, transport); and by type of platform (social media, search engine, etc.), depending on the relevant indicator.
Power over users
The power that online platforms exert over their users, whether businesses or consumers, can be assessed from various angles. First, because platforms generate value for businesses by providing them with access to demand for their products, businesses can become dependent on platforms to varying extents. As a result, they may become vulnerable to changes in the platforms’ policies (which may, for instance, affect the share of a business’s revenue that comes via online platform channels). Second, the power of the platform can be assessed in terms of its popularity among consumers. The more popular the platform, the more businesses it will attract. Third, the competitive strategy adopted by an online platform can determine its position and dominance in the market (e.g. as a result of merges and acquisitions).
The consequences of power
One of the most relevant indicators to assess the consequences of a platform’s power is the platform’s volatility and transparency. These include changes in the technologies, terms and conditions, policies and practices that make up the functioning of the online platform, and can influence businesses and consumers who use the platform. In addition, a platform’s power can be assessed in terms of the fairness of the dispute resolution systems used in case where issues arise, as well as through the types of data shared with and accessible to business users, and by the ease with which commercial data may be transferred from one online marketplace to another.