Digital Platforms’ Economy. Outcomes of the 3rd edition of “Pouvoirs numériques »

Sep 13

On September 13th, Pouvoirs numériques, the circle of discussion we initiated together with Tech in France, hosted a panel discussion on digital platforms’ economy with Pierre-Jean Benghozi, member of Arcep; Marc Bourreau, Economics Professor at Telecom ParisTech; Henri Isaac, President of the think tank Renaissance numérique; and Benoit Tabaka, Senior Policy Manager at Google EMEA. Discussions were moderated by Loic Rivière, General Manager of Tech in France, and Thaima Samman, Founding Partner of SAMMAN Law & Corporate Affairs.

A driving force of the digital economy, platforms are the subject of intense policy debates and cross-cutting research seeking to grasp their real impact on the economy and society. Since 2015, France has adopted 4 laws* that tackle some of the challenges raised by platforms, notably relative to consumer law, companies’ fiscal and social security obligations and labour law.

Left to right: Loic Rivière - General Delegate at Tech in France; Pierre-Jean Benghozi - Member Arcep; Henri Isaac - President of Renaissance numérique; Marc Bourreau - Economics Prof. at Telecom ParisTech; Benoît Tabaka - Senior Policy Manager at Google EMEA;Thaima Samman,Partner SAMMAN

The third edition of “Pouvoirs numériques” aimed to identify the principles of a legal and regulatory framework that would take into account the diversity and specificities of platforms.

According to Henri Isaac, President of the think tank Renaissance numérique and author of a Report on “Platforms and competition dynamics”, policy makers would need to adopt a 360° approach on platforms’ environment before proposing any new legislative and regulatory measures. In his view, today’s notion of platform does not cover a monolithic reality. On the contrary, platforms, as two-sided markets, can generate different direct and indirect network effects, but also different types of business ecosystems, e.g. open or closed, that reap the benefits of network effects.

According to Benoît Tabaka, Senior Policy Manager at Google EMEA, the platforms’ economy is above all beneficial to consumers. In his view, depending on their inner features, platforms enable the emergence of new start-ups and new business models which, eventually, bring to the market a variety of offers for the consumer to choose from.

Participants to 3rd edition of
Pierre-Jean Benghozi, member of the Board of Arcep, highlighted that the digital economy accelerates the rhythm of innovation in all sectors of human activity. Players in traditional sectors have no other choice but to diversify their services to stay competitive. Against this backdrop, regulators have to adapt their tools to make sure that no competition biases impact the digital transition. According to him, specific issues could be subject to ex-ante regulation, meaning that the regulator should ensure the transition from a potential monopolistic situation to effective competition in a specific economic sector.

The spreading and integration of platforms business models across traditional economic sectors incite policy makers to adapt the legal framework to this new reality, as observed by Marc Bourreau, Economics Professor at Telecom ParisTech. Yet, any new legal and regulatory changes should take account of the fact that long-term gains for the economy could be substantial if platforms are allowed to develop. It is therefore essential to avoid the creation of entry barriers for new players.

MP Luc Belot wrapped up the debate from the audience, by underlining the rich debate generated by the proposal to regulate platforms in the Parliament. As the National Assembly’s Rapporteur of the recently adopted Digital Law, Luc Bellot recalled that the law introduced new measures in the Consumers’ Code, including a definition of platforms, with a view to create a level-playing field between all market players.

Overall, the discussion stressed the evolving role of platforms in today’s economy, which calls for a monitoring phase and a testing of new regulatory models, notably by broadening the use of market analysis and “regulation by data”.

* The four French laws dealing with platforms are: the law on economic activity and growth of August 6th, 2015 (Macron law); the 2016 finance law pf December 29th, 2015; the law relative to labour, the modernisation of social dialogue and securing professional pats of August 8th, 2016 (Labor Law); and the future law for the Digital Republic (Lemaire law)