Platform Interoperability and Platform Federations

Abstract

Many digital transaction platforms are incompatible with one another: users of one platform cannot interact with users of another platform, even if both platforms offer the same type of service. While interoperability is widespread amongst many pre-digital platforms (such as telecommunications), interoperability amongst digital platforms remains scarce. Platform federations (such as the Fediverse) promise to fix this by providing a platform for other platforms to interact—a “platform of platforms.” In this chapter, we define and review the emerging phenomenon of platform federations and link it to the literature on platform interoperability. Platform federations extend traditional platform interoperability in three ways: (1) they offer flexible and extensible transaction types; (2) they reduce transaction costs between platforms; and (3) they create multi-level network effects between and within platforms. We conclude by identifying rich research opportunities around network effects, content moderation, platform competition, and antitrust, amongst others.

Keywords: Platform Federations, Platform Interoperability