van der Donk on What Exactly Is a Social Media Platform? A Study of the Equivalents of Social Media Platforms in European Law

Berdien van der Donk (University of Copenhagen Law) has posted “What Exactly Is a Social Media Platform? A Study of the Equivalents of Social Media Platforms in European Law” on SSRN. Here is the abstract:

What exactly is a social media platform? Can it be compared to a public park, a stadium, an electricity company, or perhaps to something non-existing in the physical world around us? The question on who gets to decide what can be posted on social media platforms is closely intertwined with the question what social media platforms are and how these platforms and their content should be regulated. However, a consensus on the answer to these questions does not exist.

This article contributes to the discussion on the qualification and regulation of social media platforms. It starts by clarifying the terminological inconsistencies regarding public utilities, services of general interest, universal services, and essential facilities in European law. The author continues with a literature review to summarise the current debate on the offline equivalent of social media platforms. It will show that, overarchingly, two different debates exist: on the one hand, whether platforms can be regulated as public utilities, and on the other hand, whether platforms can be compared to either a private space, a public space, or a public sphere. Subsequently, an in-depth analysis is carried out.

The author concludes, firstly, that under European law, a social media platform cannot be an essential facility as these platforms simply do not fulfil the requirements. Secondly, social media platforms should not be regulated as a service of general interest, because of their worldwide application. They could, however, be regulated as universal services, but not without extensive justification. Thirdly, since they are privately owned, social media platforms are not public places. The author argues that a social media platform is more suited to be compared to a privately owned, freely accessible place (e.g., a stadium) than a public sphere, as social media platforms do not significantly differ from existing private undertakings open to the general public.

Cachon, Dizdarer & Tsoukalas on Decentralized or Centralized Control of Online Service Platforms: Who Should Set Prices?

Gerard P Cachon (UPenn Wharton), Tolga Dizdarer (UPenn Wharton), and Gerry Tsoukalas (UPenn Wharton) have posted “Decentralized or Centralized Control of Online Service Platforms: Who Should Set Prices?” on SSRN. Here is the abstract:

Online service platforms that enable customers to connect with a large population of independent servers have been successfully developed in many sectors, including transportation, lodging, and delivery, among others. We ask a basic, yet fundamentally important, question – who should set the prices on the platform? The platform or the servers? In addition to regulatory implications for the classification of the workers on the platform as either employees or contractors, this choice influences the degree of competition among servers, and in turn determines both the amount of supply available and the overall attractiveness of the platform to consumers. We find that when the platform uses a simple commission contract to earn revenue, the price delegation decision depends on the importance of regulating competition among the large population of servers relative to the value of allowing servers to tailor their prices to their privately known costs. The same tradeoff exists in fully disintermediated platforms, such as those enabled with blockchain technology. However, merely adding appropriate linear quantity discounts or surcharges to the basic commission contract maximizes the platform’s revenue and allows all participants to enjoy the benefits of both centralized and decentralized control of prices.

Alston on Norms, Institutions and Digital Veils of Ignorance

Eric Alston (University of Colorado) has posted “Norms, Institutions and Digital Veils of Ignorance – Do Network Protocols Need Trust Anyway?” on SSRN. Here is the abstract:

In larger groups, social rules reduce individuals’ uncertainty regarding the choices other individual group members might make. But uncertainty varies as to the extent to which it is knowable and quantifiable ex-ante. Therefore, different classes of social rules deal with the future uncertainty of individuals’ conduct in structurally distinct ways, with institutions and norms being the hallmark example of this distinction. Institutions, through their costly definition and enforcement by a known organization, require specific delineation of behavior and penalties ex-ante, meaning they of necessity confront “known unknowns” (risks), or the conduct of members of an organization that can be predicted ex-ante. Norms, in contrast, are only effective in shaping behavior if sufficiently shared within a community. This makes the application of norms automatic in expectation to an individual ordering their conduct given potential norms. This makes norms apply to ex-ante known and unknown situations alike, relative to the precision that the articulation of institutions requires with respect to human behavior. Although digital governance carries the benefits (and costs) of considerable institutional “completeness”, governance by protocol is nonetheless incomplete in the face of the complex set of exogenous shocks and human actions that a given digital networked organization will experience. This means digital institutions need to mimic the adaptability of institutions more generally, through the institutional mechanisms of flexibility detailed in this analysis, considered with respect to their specific application to distributed blockchain and centralized networks alike. More generally, though, the fact that norms can serve as a complementary gap-filler in contexts where institutions do not reach suggest that digital organization designers cannot avoid simultaneous consideration of the human community of network users that will define the norms that become crucial in periods of true uncertainty for any organization.