Interoperability as a Remedy for Digital Labor Market Concentration

By Bruno Renzetti, (Yale)

Antitrust literature has focused on the problems arising from concentration in the digital economy, particularly in social media and search engines. However, there has not been an equal interest regarding the concentration in labor markets created by digital platforms. In the same way in which concentration in social media or search engines harms consumers and competition, concentration in the “digital labor market” harms the workers in such platforms. There is interesting literature on how concentration in labor markets affects workers . However, such literature refers to the “traditional” labor markets and does not consider the different status of gig workers or their relationship with the platform. The present paper seeks to fill this gap in the literature by addressing how concentration in labor markets such as ride-sharing and online meal delivery affect gig workers.

Section I of the paper provides evidence of the increasing role of gig workers in the economy and how economic crises such as the COVID-19 pandemic raised the importance of digital labor markets: workers do not only moonlight as drivers or couriers, but instead such work has become their full-time jobs. Section II explains how concentration and monopsony power in digital labor markets harm workers. Section III proposes that interoperability could be designed as a remedy for concentrated digital labor markets, vis-à-vis proposals to do the same in social media, for example. Section IV proposes that platforms could compete for workers by offering them more spontaneous benefits (not required by law or regulation), increasing their welfare, and thereby avoiding the regulatory costs imposed on the platforms. Section V concludes.

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