Yassine Lefouili (University of Toulouse 1 – Toulouse School of Economics) and Leonardo Madio (University of Padua – Department of Economics and Management; CESifo (Center for Economic Studies and Ifo Institute)) have posted “The Economics of Platform Liability” on SSRN. Here is the abstract:
Public authorities in many jurisdictions are concerned about the proliferation of illegal content and products on online platforms. In this paper, we provide an economic appraisal of platform liability that highlights the effects of a stricter liability rule on several key variables such as prices, terms and conditions, business models, and investments. We also discuss the impact of the liability regime applying to online platforms on competition between them and the incentives of third parties relying on them. Finally, we analyze the potential costs and benefits of measures that have received much attention in recent policy discussions.