Online platforms: Economic and societal effects

10-03-2021

Online platforms such as Google, Amazon, and Facebook play an increasingly central role in the economy and society. They operate as digital intermediaries across interconnected sectors and markets subject to network effects. These firms have grown to an unprecedented scale, propelled by data-driven business models. Online platforms have a massive impact on individual users and businesses, and are recasting the relationships between customers, advertisers, workers, and employers. This has triggered a public debate on online platforms’ economic dominance and patterns of pervasive data collection. The report provides evidence of positive impact, and documents a set of important issues not fully addressed by existing European regulation and enforcement. The consensus is that there is a need to strengthen the current law enforcement and regulation of the platform economy. This report welcomes the proposed Digital Markets and Digital Services Acts, and offers a series of policy options for competition and innovation, working conditions and labour markets, consumer and societal risks, and environmental sustainability.

Online platforms such as Google, Amazon, and Facebook play an increasingly central role in the economy and society. They operate as digital intermediaries across interconnected sectors and markets subject to network effects. These firms have grown to an unprecedented scale, propelled by data-driven business models. Online platforms have a massive impact on individual users and businesses, and are recasting the relationships between customers, advertisers, workers, and employers. This has triggered a public debate on online platforms’ economic dominance and patterns of pervasive data collection. The report provides evidence of positive impact, and documents a set of important issues not fully addressed by existing European regulation and enforcement. The consensus is that there is a need to strengthen the current law enforcement and regulation of the platform economy. This report welcomes the proposed Digital Markets and Digital Services Acts, and offers a series of policy options for competition and innovation, working conditions and labour markets, consumer and societal risks, and environmental sustainability.

External author

DG, EPRS_This study has been written by Professor Annabelle Gawer, Surrey Business School, University of Surrey (main author), Dr Nick Srnicek, King's College London, at the request of the Panel for the Future of Science and Technology (STOA) and managed by the Scientific Foresight Unit, within the Directorate-General for Parliamentary Research Services (EPRS) of the Secretariat of the European Parliament.