Digital Platforms – The New Network Industries? How to regulate them?

Digitalisation is transforming all industries, including the network industries. It is creating a new model of industrial organisation using online platform as intermediaries for multisided markets. As a matter of fact, digital platforms display all characteristics of the traditional network industries: network effects, efficiency, scale, concentration, market power, etc.

The involvement of online platforms in the network industries benefits consumers by fulfilling unmet needs, often efficiently and at low cost. Platforms do this partly by exploiting access to existing network infrastructures that are often vital for national economic growth and wellbeing. However, if online platforms are allowed to sideline traditional network operators, it may mean that vital investment in building and maintaining the infrastructures on which these markets are founded becomes unsustainable in the long-term.

Another pertinent issue concerns the regulatory approach to platforms, as the success of online platforms is achieved, in part, by exploiting regulatory environments that place incumbent firms at a disadvantage. There is a debate as to whether platforms should be subject to the same regulatory obligations as traditional network players, and whether platforms should have access to network services under regulated terms.

Following the 8th Conference on Regulation of Infrastructures, which took place on June 20 and 21, 2019 with a particular focus on the key challenges of digitalisation for traditional network industries in the transport, telecoms, water and energy sectors, four papers were selected for this publication due to their topical relevance.

This special issue opens with an introductory article by the Members of the Scientific Committee of the conference, Professors of the Florence School of Regulation, Montero and Finger, who consider digital platforms as the new network industries and explore the network effects created by platforms.

Fuentes et al. looks at the electricity sector, which is navigating major disruptions that are changing the regulatory and business landscape. The paper addresses whether these changes would help or hinder electrification, taking transportation as an example.

Becchis, Postiglione and Valerio examine how platforms are giving rise to a series of regulatory challenges, with a focus on their legal definition, labour-related issues in the digital sphere and the role of data between privacy protection and competition.

Knieps analyses the problem of division of labour among all-IP broadband network providers, virtual network service providers and platform operators concomitant with the implementation of adequate governance structures.

Ducuing analyses the phenomenon, when several (contemplated) data sharing legal regimes appear to essentially recognise and regulate data as an infrastructure, although without explicit reference to this notion. Her research is based on three cases, namely the Open Data and PSI Directive, the on-going institutional discussion on the governance of in-vehicle data and the freshly adopted regulation of data in the Electricity Directive.

Separate articles can be downloaded from the links below:

Digital Platforms as the New Network Industries

Juan José Montero, Matthias Finger

From the ‘iPhone effect’ to the ‘Amazon’ of Energy

Rolando Fuentes, Lester C. Hunt, Hector G. Lopez-Ruiz, Baltasar

Regulating the Platform Economy: Problems, Challenges, Tools

Franco Becchis, Monica Postiglione, Stefano Valerio