Are online platforms the new utilities—and should they be regulated as such? Inspiration from over 100 years of telecommunications regulation
Bostoen, F.
The paper “Are online platforms the new utilities—and should they be regulated as such? Inspiration from over 100 years of telecommunications regulation” (Bostoen, F.) will be presented at the 8th Conference on the Regulation of Infrastructures (20-21 June, 2019).
ABSTRACT
Online platforms are increasingly perceived as utilities—in the press but also within academic circles. The idea is gaining traction that an ever more limited class of online platforms is providing the essential infrastructure for anything from social interaction to e-commerce. The Economist, for example, has noted that ‘Amazon could become a new kind of utility: one that provides the infrastructure of commerce, from computing power to payments to logistics.’ The social network Facebook went one step further and expressly termed itself a utility.
The flip side of the designation as ‘utility’, however, is that it inevitably comes with calls for regulation. Of course, regulatory action is not based on the popular notion of ‘utility’ but rather on the economic measure of market power. Policymakers are increasingly recognizing that online platforms command such market power, derived mainly from economies of scale and network effects—the classic network sector characteristics that telecom operators also benefit from.
The parallel with telecom operators runs deeper. For over 100 years, policymakers have been regulating the competitively harmful behavior of telecom operators. Such behavior has included excessive mergers and acquisition activity, denying competitors operability with or access to their network, and discriminating downstream competitors that make use of their network.
We now see online platforms engaging in similar behavior, and research shows that its consequences are equally anticompetitive. Policymakers are, however, struggling to come up with effective, comprehensive solutions. The European Commission has proposed a regulation on platform-to-business trading practices, while the French Parliament already adopted a law imposing an obligation of ‘platform fairness’ (essentially imposing transparency obligations). There has also been antitrust enforcement, most notably against Google. While these interventions are laudable, they only address a subset of the perceived problems, and not necessarily in the most effective way.
The objective of this paper is therefore to study to what extent regulatory interventions at the telecom level may inspire effective intervention at the platform level. More specifically, the paper will examine (i) to what extent the relevant regulatory tools can be transposed; and (ii) to what extent they should be transposed, given the different nature of each layer. A central part of this research thus consists in developing a taxonomy of telecom-level interventions that may be deployed at the platform level.
ABOUT THE AUTHOR
Friso Bostoen is a full-time Ph.D. researcher at the University of Leuven (KU Leuven) and a fellow of the Research Foundation Flanders (FWO). He holds a Bachelor and Master of Laws from the KU Leuven, and studied at the University of Sydney during his master’s program. As a part of his on-going Ph.D. research, Friso is currently completing a stay at Harvard Law School. He is also one of the editors of the CoRe Blog on European competition and regulatory law.
Friso’s research interests center around competition law and the digital economy. In particular, he is exploring how potentially abusive practices by online platforms—especially towards the businesses that use their platform—should be assessed under Article 102 TFEU. Friso’s research has resulted in various publications (e.g. in the Journal of Antitrust Enforcement and the Computer Law & Security Review) and presentations at international conferences (e.g. in India, Sweden, UK, Italy).
For more information, visit Friso’s university and SSRN author page.
