In this article, we bring the discussion of potential interconnection regulation for digital platforms. By reviewing the lessons from the U.S. telecommunication industry and the distinctive features of digital platforms, the article explores the new challenges of interconnection regulation for digital platforms. With varying degrees of network effects across platform types and market segments and different levels of interconnection preferred by platforms and consumers, a single threshold of regulatory intervention may not serve the purpose of improving consumer welfare and economic efficiency. Given the more innovative business nature and dynamic competition faced by digital platforms, the costs on innovation incentives and consumers’ long-term well-being should be given full consideration when deciding whether and how to establish an interconnection regulation regime for digital platforms.
By Kun Huang, Ziyi Qiu & Zhaoning Wang1
Digital platforms are usually defined as a commercial network that enables transactions in the form of business-to-business (“B2B”), business-to-customer (“B2C”), or customer-to-customer (“C2C”) exchange.2 When digital platforms carry different networks, connection of multiple networks for the mutual exchange of traffic is often considered as a common form of platform interconnection.3
In the era of the digital economy, whether to impose interconnection regulation for digital platforms has been an i!-->…