Digital Economy: Regulating Digital Platforms and Intermediaries

In the 1990s Bill Gates said: ‘As we look ahead into the next century, leaders will be those who empower others.’ He has been proven right. Over the last two decades intermediaries have emerged that empower, among others, writers and other content creators, innovators, traders, programmers, businesses and start-ups. These intermediaries are private businesses technologically enabled by digital platforms. They are the cyberspace counterparts of, for example, newsletters, pinboards, bazaars, public squares, roads and toolboxes. A new kind of digital economic ecosystem has emerged and needs to be addressed by regulation. The relevant laws are about to be changed in the US and in the EU.

The regulation of this ecosystem needs to preserve and possibly enhance the dynamism of innovation and remain open and competitive. On private platforms existing national laws and human rights must be observed. The enforcement of the law should in principle be carried out by the government and in principle the responsibility to comply with the law lies with each of the actors involved. Platforms may voluntarily assist in law enforcement on their platforms. Moreover, platforms are free to set their own rules on who may use them and what can be done on them.

However, some of these platforms play a pivotal and sometimes unique role which, naturally, gives rise to calls for them to be subject to regulatory oversight that would place constraints on their ability to set their own rules. Such oversight is needed to ensure that platforms are open to all users who would make lawful use of their services. It is also needed to help ensure that any rules set by the platform operators are fair and are applied in a manner that ensures free and fair competition. Regulations that attempted to stifle innovation or limit freedom of expression would be harmful. The same holds for regulations that simply tried to prevent the shift towards the platform economy for the sake of protecting the old ways of connecting customers and providers.