Digital Platforms Regulation: An Innovation-Centric View of the EU’s Digital Markets Act

20 Pages Posted: 18 Jul 2022

See all articles by Carmelo Cennamo

Carmelo Cennamo

Copenhagen Business School - Department of Strategy and Innovation; SDA Bocconi

Tobias Kretschmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management); Centre for Economic Policy Research (CEPR)

Panos Constantinides

University of Manchester - Manchester Business School Worldwide

Cristina Alaimo

LUISS University

Juan Santaló

Fundación Instituto de Empresa, S.L. - IE Business School

Date Written: July 1, 2022

Abstract

We consider the merits of the recent EU’s Digital Markets Act from the perspective of innovation and value creation. We conceptualize innovation as new interactions being created by the digital platform leading to ‘value creation’, in contrast to facilitating existing interactions or market transactions, which we conceptualize as coordination between business users and end-users leading to ‘value exchange’. We apply this innovation perspective to the DMA to assess two of the most contentious provisions: self-preferencing and data-sharing. We show how these practices reveal great heterogeneity regarding the extent to which they facilitate innovation (and thus value creation) or only affect redistribution of value depending on whether they replace existing interactions (little to negative innovation effect), sustain existing interactions (moderate, positive innovation effect), or they trigger new interactions (large, positive innovation spillovers).

Keywords: DMA; platform regulation; innovation; value creation; value exchange; self-preferencing; data-sharing; interactions

JEL Classification: M1; M2; L1; L4; L5; K21; L12

Suggested Citation

Cennamo, Carmelo and Kretschmer, Tobias and Constantinides, Panos and Alaimo, Cristina and Santalo, Juan, Digital Platforms Regulation: An Innovation-Centric View of the EU’s Digital Markets Act (July 1, 2022). Available at SSRN: https://ssrn.com/abstract=4152120 or http://dx.doi.org/10.2139/ssrn.4152120

Carmelo Cennamo (Contact Author)

Copenhagen Business School - Department of Strategy and Innovation ( email )

Kilen
Frederiksberg, 2000
Denmark

HOME PAGE: http://www.cbs.dk/en/staff/ccesi

SDA Bocconi ( email )

Via Bocconi 8
Milan, MI 20136
Italy

Tobias Kretschmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Panos Constantinides

University of Manchester - Manchester Business School Worldwide ( email )

United Kingdom

Cristina Alaimo

LUISS University ( email )

Rome
Italy

Juan Santalo

Fundación Instituto de Empresa, S.L. - IE Business School ( email )

Calle Maria de Molina 12, Bajo
Madrid
Spain

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