Platform regulation

The digital economy challenges not only the traditional business models but also regulators and legislators since they defy conventional regulatory strategies. The paper starts enquiring whether and how platforms must be regulated and whether current regulations can be extended to the platform economy. Generally speaking, there is a shared opinion that platforms are to be regulated. However the question is whether the risk of conflicting objectives between innovation and other legal protected values can be avoided. With regard to financial markets in particular, the paper will highlight also the effects of the last generation of algorithms, their functioning and the concerns arising from automated decision mechanisms. From this perspective it will suggest that a strategy based on disclosure regulation can improve transparency of algorithmic decisions as stated in the provisions to enforce the Directive Mifid 2. Nonetheless a question is unanswered so far: whether regulators and supervisors are able to manage technology as powerful mode of regulation.

Social media platforms are increasingly accused of shaping public debate and engineering people’s behavior in ways that might undermine the democratic process. In order to vitalize a much-needed multistakeholder dialogue on corrective measures against the spread of false information, this project has undertaken a truncated multistakeholder consultation, addressing experts from academia, civil society, governments and the industry to assess diverging perspectives on institutional proposals, legislative responses, and self- regulation resolutions that have sprung up around the world. It also asks what new challenges platform moderation and related “fake news” issues pose to what might be called the “procedural fitness” of the current multistakeholder internet governance system. Finally, it suggests recommendations for architectural changes that could promote constructive and inclusive debate on the topic.

At the 2019 United Nations Internet Governance Forum (IGF), during
the customary stocktaking meeting of the Coalition on Platform
Responsibility,1 hereinafter “the Coalition”, taking place after the
annual session, the main suggestion emerging from participants
as a next step in the Coalition work has been the elaboration of
a Glossary of Platform Law and Policy Terms, so as to provide a
common language for academics, regulators and policymakers when
discussing issues of platform responsibility.
In this perspective, the elaboration of this Glossary aims at providing
the conceptual basis on which legal interoperability between different
systems framing platform governance can be built. Through this
Glossary, we aim at offering guidance on what specific platform-
related concepts mean, so that different stakeholders and, particularly,
policymakers may have a better understanding of such a complex set
of issues, thus elaborating well-informed and, ideally, good-quality
and compatible platform policies and regulations.

The first part of this study will review the relationship between technological progress and gatekeepers, as well as the main gatekeepers in the television value chain. The second part of the study will analyze the new gatekeepers in the online media value chain. Through their search and ranking algorithms, intermediaries such as search engines, social networks and app stores can also effectively influence the online information that is available to audiences. The problems with these services are to a substantial extent similar to those that apply to the gatekeeper's control over access. At the same time, however, they also raise new issues regarding the possibility of accessing diverse information, primarily with regard to the risks stemming from biased information because of individualized content selection, what is known as the so-called “filter bubble”. The third part of the study provides a systemic overview of regulatory responses to the access problems emanating from the operation of gatekeepers, as well as their applicability in the case of intermediaries.

The Facebook/WhatsApp case has demonstrated that, in the event that data protection and competition law intersect, it does not appear sufficient to look at the merger solely from the angle of competition. The reason is that if we look at a merger only and exclusively as a transaction aimed at reducing competitive pressure in the market by buying up a competitor, the Commission’s decision can only be subject to potential criticism with respect to its definition of the market in
question. However, if we also look at the competitive advantaged gained by linking the databases then the Commission’s decision can be disputed on the merits, too. The reason is that although the Commission declared that, from a data protection perspective, it did not see grounds for reviewing the transaction, the controversial question at issue in the context of the merger does not concern data protection but data assets. And the Commission should definitely have incorporated the issue of data asset management among the competition law considerations reviewed in the decision, because the question of how Facebook handles the personal data it accumulates in the performance of its service is indeed a data protection law issue; nevertheless, the question of what type of competitive market advantage the linked databases generate – personal information as a data asset and a non-material good – could have been examined from a competition law angle.

The development of digital landscape has caused significant disruptions in media and policy, including a need for shift in the definitions and measurements of different forms of concentrations and plurality. To adequately define media pluralism within the media policy, it is no longer sufficient to address concentration of ownership of “traditional” media companies. Regulation and monitoring mechanisms need to add the issue of concentration of digital content and distribution intermediaries.

Concentration of media ownership is seen as one of the biggest threats for media pluralism as it may narrow the diversity of editorial voices and information. To ensure sufficient plurality and diversity, most countries in the EU, within their media policy, have enacted certain limits or thresholds on horizontal concentration in traditional media markets. The specific safeguards to prevent cross-media concentration are less common, but in those cases general competition laws (antitrust and merger control) may also apply and take sufficient account of media pluralism. Market positions of digital content and distribution intermediaries have currently not been taken into account with the same approach.

Although the change in technology in legal theory should not present a key legal issue (McLeod 2009, 32), the contemporary disruptions represent such a radical shift that lack of response in media policy risks losing touch with current realities. In the current environment, the news and information are increasingly produced and shared outside traditional journalistic institutions. Digital intermediaries are often not defined as ‘media’ but increasingly act as editors (Helberger, 2017) and main sources to engage with news (which is still largely produced by traditional media) (Newman et al. 2017). These gatekeepers dominate online/digital environment, diminishing the role and importance of traditional, legacy media also within the issue of plurality. Regulating traditional media technologies, thus, “but leaving the internet free creates distortions in the media market.” (Looms 2011).

The Media Pluralism Monitor currently covers two types of media concentration: horizontal and cross-media, considering also the concentration of Internet Service Providers (ISPs) and Internet Content Providers (ICPs). The Monitor assesses the actual level of different types of concentration based on the “four-firm (or Top 4) concentration ratio” (CR4). The experience of the MPM, and the changing reality, require for more nuanced measuring method, as well as for more aspects and actors to be measured, in particular the concentration of distribution networks and the (dominant) (new) intermediaries which increasingly influence or determine the conditions for access to, and the nature of, the media and content. The paper presents an analysis of existing measures as well as critical assessment of potential shortcomings and additions, stemming from historical discussions on cross-media regulation and concentration measures, including ponders based on reach, access, actual use, and income (Robinson 1996; Graham 1996).