Difficult Choice of a Rational Approach to Regulating the Activities of Digital Platforms

This paper examines the current situation with major digital platforms, so-called gatekeepers, and the available approaches to regulate them. In their early days, digital platforms were perceived as a major step forward to create new global competitive market, offering new opportunities for producers and consumers around the world, driving down the costs, and increasing efficiencies for commercial, scientific, and other activities online. However, as of today, the gatekeepers have become true monopolies, charging extra monopoly markups for their services, manipulating markets, offering unfair trading conditions for commercial market players, and manipulating customers to attain change in their preferences, choices, and behavior. This came as the result of leaving digital markets without any regulation whatsoever for decades, allowing dominant market players to set rules, drive rivals off the market, and engage in other kinds of abusive behavior. Now, many jurisdictions have already completed their analytical phase and proceeded to legislation proposals regarding regulation of digital platforms and specifically the gatekeepers. However, given the scale of distortion of digital markets, the regulation should be careful, as sudden change of rules could break the existing market structure and lead to a rise in costs and a major loss of efficiency, which would harm producers, consumers, gatekeepers and ultimately the regulating states themselves.