Can Self-Regulation Save Digital Platforms?

Industrial and Corporate Change

36 Pages Posted: 9 Aug 2021

See all articles by Michael Cusumano

Michael Cusumano

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Annabelle Gawer

University of Surrey

David Yoffie

Harvard University - Strategy Unit

Date Written: July 14, 2021

Abstract

This article explores some of the critical challenges facing self-regulation and the regulatory environment for digital platforms. We examine several historical examples of firms and industries that attempted self-regulation before the Internet. All dealt with similar challenges involving multiple market actors and potentially harmful content or bias in search results: movies and video games, radio and television advertising, and computerized airline reservation systems. We follow this historical discussion with examples of digital platforms in the Internet era that have proven problematic in similar ways, with growing calls for government intervention through sectoral regulation and content controls.
We end with some general guidelines for when and how specific types of platform businesses might self-regulate more effectively. Although our sample is small and exploratory, the research suggests that a combination of self-regulation and credible threats of government regulation may yield the best results. We also note that effective self-regulation need not happen exclusively at the level of the firm. When it is in their collective self-interest, as occurred before the Internet era, coalitions of firms within the same market and with similar business models may agree to abide by a jointly accepted set of rules or codes of conduct

Keywords: Self-regulation, Digital platforms, Historical examples, Platforms, Ecosystems

JEL Classification: L1, L2, L22, N00

Suggested Citation

Cusumano, Michael A. and Gawer, Annabelle and Yoffie, David, Can Self-Regulation Save Digital Platforms? (July 14, 2021). Industrial and Corporate Change, Available at SSRN: https://ssrn.com/abstract=3900137 or http://dx.doi.org/10.2139/ssrn.3900137

Michael A. Cusumano

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

E52-555
Cambridge, MA 02142
United States
617-253-2574 (Phone)
617-253-2660 (Fax)

Annabelle Gawer (Contact Author)

University of Surrey ( email )

Guildford, Surrey GU2 8DN
United Kingdom

HOME PAGE: http://www.surrey.ac.uk/sbs/people/annabelle_gawer/

David Yoffie

Harvard University - Strategy Unit ( email )

Harvard Business School
Soldiers Field Road
Boston, MA 02163
United States

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