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.
Dimension 1
Economic significance
The data have been collected by analysing the businesses’ financial reports or other intelligence and business information research websites that collect relevant data on different companies. Our final sample consists of the following number of platforms by platform type: 11 online applications stores, 16 e-commerce market places, 4 online search engines, 6 online media platforms, 5 online social media platforms, 6 online travel agencies and 8 collaborative economy platforms. Thus, we conducted the analysis on a final sample encompassing 56 platforms (for the remaining 11 platforms, no data on revenue could be retrieved).
Dimension 2
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 data of this report have been collected by analysing results from the business survey carried out by the Observatory, web scraping and data collection from specific sources on mergers and acquisitions, web traffic, etc.
Dimension 3
The consequences of power
This quarterly report analyses the consequences of the platforms’ power in the online platform economy based on a literature review and the results of the survey with businesses using online platforms to sell or advertise. The consequences of the platforms’ power are analysed from the perspective of the end users, these being regular users (citizens) and businesses. Firstly, the report looks at end users’ main concerns regarding online platforms, such as working conditions, citizens’ concerns about how their data is being used or general trust in social media. The second part highlights the consequences of platforms’ market power from the perspective of businesses using such platforms.