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[G2] PR11 Policy: How Platforms Should (and Should not) Be Regulated…
[G2] PR11 Policy: How Platforms Should (and Should not) Be Regulated
Time for regulation 2.0 ?
Regulation 1.0
prescriptive rules
certification process
gatekeeping
Regulation 2.0
open innovation
dara-driven transparence
accoutability
foster fairness
security and safety
create trust
Regulation 2.0
data-driven accountability
after-the-fact transparency
enforce high community standards of behavior
require significant talent upgrades on the part of government agencies
complex revisions to existing statutory codes
Advice for regulation
Focus on safeguarding the interests of the general public
industries with strong network effects can generate market inefficiencies
minimize the situation
three steps process
examine whether the platform has a functioning internal governance system in place
To see whether the governance system is mostly being used to reduce negative externalities or reduce competition or take advantage of a dominant market position
ask whether the anticompetitive behavior outweighs the positive benefits of the governance system
Regulatory Issues
National Control of Information assets
Data storage in each country
decrease in data usability
Tax Policy
Who pays the tax where?
Data Privacy and Security
Fair Pricing
Predatory pricing
two sided externalities
Labor regulations
employee or freelancer?
Platform Access
exclusion of potential participants
is it fair?
what´s the long term impact?
who benefits
Potential manipulation of consumers and markets
The regulatory challenge
:star:To design balanced internal governance systems and external regulatory regimes to ensure they operate fairly
public safety
economic fairness and more
affordable housing
Significant tension between different social goals
Promoting innovation and economic development
argue for a relatively laissez-faire
Preventing harm
encourage fair competition and maintaining respect for the rule of law
The dark side of the platform revolution
Externalities issue
Airbnb
Externalities
assignations with prostitute
rowdy young drunks
orgy tenants
Positive externalities
increase the tourism business
benefit local restaurant and other attractions
MonkeyParking
Externalities
encourage privatization and monetization of a public good
regulator stepped in to close the platform
Positive externalities
environmental benefits
reduce burning fossil fuels
decrease traffic congestion
Freelance economy/1099 economy
Against regulation
Regulatory failure: regulatory capture
market participants will act to influence regulation in their own interests
A complete absence of regulation
produce high social and economic costs
unfair competition
monopolistic and oligopolistic practices
business fraud
The most extreme level of government intervention into market
like totalitarian countries
inefficiency
waste
corruption
lack of innovation
:star:An intermediate solution is best: institutional possibility frontier(IPF)