Digital platforms are playing an increasingly important role in the economy and society, and have made significant contributions to the growth of the European economy and to the strengthening of the internal market. The digital economy was estimated in 2019 to account for between 4.5-15.5% of global GDP, and nearly one quarter of online trade is crossborder. The digitisation of services has been associated with widespread innovation, increased competition and consumer benefits. However, digitisation has also been associated with the ability of certain players to act as gatekeepers, controlling access to the information that endusers see and the services they receive and controlling the functionality, positioning, terms and conditions available to businesses depending on those platforms.
There is widespread and compelling evidence from competition cases, as well as from case studies conducted for this study and feedback from stakeholders, that certain platforms have become vital gateways for business users and end-users, and that platforms which act as gatekeepers can impose unfair conditions on the businesses and application providers which depend on them, as well as engaging in practices which could ultimately exclude potential competitors from the market.
The power wielded by large gatekeeper platforms in turn risks concentrating R&D expenditure and undermining innovation and disruptive entry, as well as limiting the choice and variety of services available to end-users, and potentially increasing prices. Moreover, in the absence of action at EU level, action may be taken in different ways by Member States, risking the fragmentation of the single market and increased costs and frictions for platforms business users seeking to do business cross-border.
Available evidence suggests that existing measures are insufficient to address these problems, and that Europe would benefit from the introduction of EU-wide legislation which would apply ex ante regulatory obligations on platforms which have the ability to act as gatekeepers. The impact of this measure could be maximised by combining clear requirements directly in the legislation with the ability to conduct a case by case analysis and apply more flexible and tailored measures in cases where it is not possible to make the designation of gatekeepers or design of associated obligations entirely self-executing. The European Commission is best-placed to act as the regulatory body in applying and enforcing these measures, supported by a network of experts from national administrations.
Evidence suggests that unlocking the full potential of the platform economy could increase EU27 GDP by between EUR 43.7 and EUR 174.5 billion from 2019 to 2029. Increased R&D resulting from a more diverse pool of innovation could create between 136,387 and 294,236 new jobs. Moreover, if prices reduce inter alia as a result of increased competition and lower commission charges, estimates based on JRC calculations suggest that consumers could gain around EUR 13 billion per year.
The study is available for download.