The role of regulation in facilitating new business models driven by digital platforms: creating regulatory ecosystems

ABSTRACT Digital platforms are facing a wave of regulatory activity in the UK and EU, primarily targeting their dominance, anti-competitive nature, and misconduct facilitated by their networks. Implementation of the new regulatory regimes is heavily reliant on the cooperation of the platforms themselves and use of their digital architecture, highlighting a potential weakness in the efficacy of the regulatory approach adopted. Though reference is made to the desire to deliver growth, innovation, and competition while minimising burdens on business, the prevalent regulatory tone is one of command and control with a punitive regulatory pitch targeting platforms’ financial interests. This paper presents the hypothesis that pitching towards the more practical motivations of regulatory targets, with a cooperative tone, will yield more successful and economically beneficial outcomes. A context-specific mix of regulatory modes combined with an understanding of the specific characteristics of digital platforms should be the foundation for regulation.