Regulating the platform economy. Assessing to what extent digital platforms in the EU need to be regulated considering competition law and data protection issues – a comparative case study of Airbnb and Uber
Summary
Digital platforms operating in two-sided markets have seen a swift rise and development over the past decade, disrupting traditional business models and circumventing existing regulatory frameworks. Technological advancements, smart technology, the collection and storage of big data, and increasing digitalisation have enabled platforms to rigidly enter (digital) markets and severely challenge traditional service providers. In particular with the introduction and mass adoption of the smartphone, the lives of many have been significantly altered; almost any service can now be accessed by using a digital platform. Besides efficiencies brought about by these platforms such as sparking innovation, platforms also cause negative externalities. Examples hereof include social exclusion and/or inactivity, data protection failure, abuse of a dominant market position (market control), and information asymmetries. The European Union (EU), member states, and local authorities each struggle with combating these types of market failure convincingly, in part due to inept regulatory measures deemed unfit for the digital age. This raises the question of how and why platforms (in the EU) should be regulated. By focusing on competition law and data protection issues, the present thesis demonstrates that two of today’s most dominant digital platforms (Airbnb and Uber) tend to be in tension with existing regulatory frameworks. Both public interests under scrutiny remain regulatory challenges to date. As such, this thesis contributes to ongoing academic and societal debates on how digital markets ought to be regulated from a multi-level governance perspective. The results suggest regulatory measures are best undertaken at the local level to address and combat negative externalities, whilst at the same time indicating a substantial role for the EU, and individual member states to a lesser extent. The findings also highlight to account for sector-specific legislation. Further research should look at the presumption that legislation initiated at the local level could perhaps best solve dilemmas that digital platforms bring about – as a growing body of literature hints at the importance of local regulation in terms of effectively regulating the platform economy.