On the Origin of Platforms: An Evolutionary Perspective
Abstract
Hardly a day goes by without news of some proposed intervention by competition authorities into the digital economy. In recent years, enforcers in both the United States and Europe have initiated dozens of competition cases against Silicon Valley’s tech giants. Legislators around the globe have also passed sweeping regulations that fundamentally alter the way that large online platform markets function. These antitrust and regulatory initiatives are part of a global push ostensibly to “open up” digital markets. This paper uses the lens of evolutionary theory to shed new light on these initiatives. It suggests that current policy debates insufficiently consider whether the purported imperfections of digital platform markets might be “features” rather than “bugs.” The paper focuses on two characteristics that drive a significant share of contemporary competition enforcement-namely, the “openness” of platforms (or, more precisely, the purported lack thereof) and the degree to which they are “propertized.” In that respect, this paper identifies a sharp divergence between the online platforms that authorities want and those that emerge organically. The paper questions what forces might be driving this discrepancy and discusses their implications for contemporary policy-making discussions.