Regulating online platforms: Lessons from 100 years of telecommunications regulation

Policymakers are increasingly sounding the alarm on the economic and political power of online platforms, i.e. the digital intermediaries such as Google, Amazon and Facebook. This concern is fueled by recent scandals such as Cambridge Analytica, but while such events capture the public’s attention, the anticompetitive behavior of these
platforms is more subtle but no less harmful to consumers. Valid concerns have been raised, for example, about the way in which platforms buy out potential challengers in ‘killer acquisitions’ or discriminate against competitors in vertically related markets. Due to the novelty of the behavior, a coherent regulatory response has been absent. However, the behavior is not completely novel: over the past 100 years, telecom operators have been regulated to prevent the same kind of anticompetitive conduct that platforms are now being accused of. That is why this paper surveys the
history of telecom regulation and transposes the various interventions to the digital sphere. The goal is to devise a taxonomy of regulatory options and to clarify the trade-offs inherent in each of them. In doing so, account is taken of both EU and U.S. law and policy in the telecom as well as the platform sphere. The result is a toolbox for regulators to rationalize their policy towards platforms, bearing in mind that the effectiveness of each intervention depends both on the kind of platform and the kind of conduct they want to target. Nevertheless, this paper clearly concludes which regulatory options should be given priority over others to spur competition in the platform economy.