Work stream on differentiated treatment: Final report

Inge Graef, Doh-Shin Jeon, Bernhard Rieder, Joris van Hoboken, Martin Husovec

Research output: Book/ReportReport

Abstract

This report analyses practices of differentiated treatment, whereby a platform applies dissimilar conditions to business users in equivalent situations, and explores the extent to which such practices constitute a potential source of “unfairness” in the relationship between platforms and businesses in the online platform economy. A distinction is made between practices of self-favouring, whereby a platform gives preferential treatment to its own vertically integrated activities over those of rivals, and more general practices of differentiated treatment where one or more business users are treated more favourably than one or more others.

The report aims to provide guidance on how to assess the impact of differentiated treatment by online platforms from a technical, economic and legal perspective, and identifies areas requiring further scrutiny because of the especially problematic nature of certain practices implemented by platforms. Special scrutiny seems particularly needed for practices of differentiated treatment by vertically integrated platforms that are dominant or whose consumers single-home and have high switching costs. In these circumstances, the relevant harms can outweigh the efficiencies of differentiated treatment. Another area of attention is differentiated treatment that significantly harms business users and for which the platform does not have a legitimate justification. The extent to which legitimate reasons invoked by a platform can justify harm to businesses is a key issue for future consideration. Significant harm to business users may translate into consumer detriment through less choice and diversity of offerings.

Specific future prohibitions of certain problematic practices of differentiated treatment to promote diversity, fairness or equality of opportunities for businesses should be coupled with effective monitoring and enforcement mechanisms. Two areas are of particular concern: 1) the observability of differentiated treatment by platforms arising from techniques such as personalisation and localisation; (2) the availability of effective redress for businesses against the restriction, suspension or termination of service by platforms.
Original languageEnglish
PublisherEuropean Commission
Number of pages37
Publication statusPublished - Mar 2021

Keywords

  • Discrimination
  • Self-favouring
  • Recommendation bias
  • Rankings
  • Competition
  • Observability of platform practices
  • Rights of individuals

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