?? Platform Power: A measure for weaponizing consumers? ??

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#BridgingTheGap (#1)

In our inaugural post, we delve into the concept of platform power, a critical element in today’s digital landscape. According to Culpepper and Thelen’s insightful research, platform power arises from the unique economic scale and consumer dependence that platforms like Amazon, Google, and Facebook enjoy. This power is not just about size but about the intimate, everyday connection these platforms have with consumers.

What is Platform Power?

Platform power is the influence that large technology firms wield by controlling access to goods, services, and information for millions of consumers. This power doesn’t stem primarily from traditional lobbying or campaign contributions but from the tacit support of consumers who rely on these platforms. This dependence can turn consumers into a formidable opposition to any regulation that threatens their convenience and access.

Is platform power the same as market power?

Platform power is related to, but not the same as, market power. While market power is a necessary condition for platform power, it is not sufficient on its own. Platform power arises from the consumer’s dependence on the convenience provided by the platform, creating a political clout that extends beyond traditional market power: “Market power is a necessary but not sufficient condition for platform power. The mechanism that translates market power into political clout flows from the appreciation, verging on dependence, that consumers have for the convenience these companies provide” .

Can platform power be regulated effectively?

Effective regulation of platform power is challenging because of the deep consumer reliance on these platforms, but it requires addressing both market dominance and consumer dependency: “Legal approaches that stress monopoly control alone… miss a critical new source of business power that stems from the connection that today’s platforms have forged, and actively cultivate, with consumers” .

How can policymakers address platform power?

Policymakers need to balance the benefits of platform innovation with the need for regulation to protect competition and consumer rights, potentially leveraging public opinion to support regulatory measures: “Putting the consumer–platform alliance in the analytical foreground helps to explain variations in the political strategies and observed political effectiveness of platform companies around the world” .

Unanswered Questions

When both companies and users unite against government regulations, it highlights potential regulatory inefficiencies or suggests that the state might be advocating its own interests rather than the public's. Additionally, digital platforms are increasingly assuming the role of new public spaces with governance mechanisms responsive to consumers. This dynamic forces a retreat of the state, making traditional institutions and politicians uncomfortable, and should prompt us to rethink established models of public-private governance.

To keep an eye out

EU’s Digital Services Act (DSA) and Digital Markets Act (DMA) The EU’s Digital Services Act (DSA) and Digital Markets Act (DMA), which aim to curb the market power of large tech platforms, have been making headlines and illustrate the challenges of regulating platform power. Read more

Meta stops EU roll-out of AI model due to regulatory concerns and this battle should become one where individuals might soon be divided between their consumer needs tapped into by companies and citizen concerns by politicians. Read more

For the Brazilians followers: Asian e-commerce Platforms’ Fight Against Import Tax in Brazil A worth watching attempt of e-commerce platforms, such as AliExpress, Shein, and Shopee to mobilize consumers to push back against new tax and regulatory measures. Hear more

Bridging the Gap

The concept of “platform power” can help policymakers and tech lobbyists anticipate potential shifts in the power balance around sensitive regulatory areas. While tech lobbying and politicians are constantly fighting over consumer support to defend regulatory positions, understanding where these alliances may shift is crucial for effective policy-making.

Academics still need to further explore how platform power emerges. It can be quite self-evident to point it out in the dominance of big tech companies, but what is less obvious is how these companies transitioned from challenging underdogs to their current powerful positions. I'll share some ideas about that in our next posts.

As we continue this series, I invite you to share your thoughts on the evolving landscape of platform power:

• How can policymakers effectively regulate platform power without stifling innovation?
• What role should consumers play in shaping the regulatory environment?
• How do you foresee platform power influencing future technological advancements?

Your insights and experiences are invaluable as we navigate these complex issues together.

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Reference: Culpepper, P. D., & Thelen, K. (2020). Are We All Amazon Primed? Consumers and the Politics of Platform Power. Comparative Political Studies, 53(2), 288–318. Read more.