The Code of the Platform

55 Pages Posted: 31 May 2019

See all articles by Abbey Stemler

Abbey Stemler

Indiana University - Kelley School of Business - Department of Business Law

Joshua E. Perry

Indiana University - Kelley School of Business - Department of Business Law

Todd Haugh

Indiana University - Kelley School of Business

Date Written: February 20, 2019

Abstract

Digital platform-based businesses such as Uber, eBay, and Google have become ubiquitous in our daily lives. They have done so by expertly harnessing technology to bring supply and demand side users together for commercial and social exchange. Users are happy to let these platform companies play “matchmaker” because transaction costs are lowered — it is easier to find or give a ride, buy or sell a product, or obtain almost any kind of information than ever before — and platforms are happy to be at the center of the exchange, taking advantage of network effects to grow wildly successful. Despite that success, however, there is an increasing unease with the methods that platforms use to sustain their multi-sided markets — namely, users question whether they are being manipulated by some of their favorite companies. This Article offers a first-of-its kind analysis into both the legality and ethicality of platform companies, specifically their use of technologically enhanced behavioral science to mediate user transactions. After providing a more complete descriptive account of how platform companies operate and succeed than is available in the current literature, including an in-depth analysis of the choice architecture platforms employ to structure almost every decision made on the platform, the Article evaluates whether platforms manipulate users. Various activities of platform companies are assessed and charted on a platform manipulation matrix as part of an integrated framework that evaluates the autonomy costs platforms impose upon users. Once done, it becomes clear that much of what platforms do is indeed manipulative; yet much is also beneficial to users and companies alike. The Article then offers a path forward, an ethical code to be used by platforms, users, and regulators aimed at reducing manipulative practices — a new Code of the Platform.

Keywords: Uber, Airbnb, Sharing Economy, Facebook, Google, Platforms, Ethics, Behavioral Science, Regulation, Innovation

Suggested Citation

Stemler, Abbey and Perry, Joshua E. and Haugh, Todd, The Code of the Platform (February 20, 2019). Georgia Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3385262

Abbey Stemler (Contact Author)

Indiana University - Kelley School of Business - Department of Business Law ( email )

Bloomington, IN 47405
United States

Joshua E. Perry

Indiana University - Kelley School of Business - Department of Business Law ( email )

Bloomington, IN 47405
United States

Todd Haugh

Indiana University - Kelley School of Business ( email )

1309 East Tenth Street
Bloomington, IN 47405
United States

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