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The economics of platform liability
Yassine Lefouili1, Leonardo Madio2,3
1Toulouse School of Economics, University of Toulouse Capitole, Toulouse, France.
This study examines platform liability for online misconduct, analyzing economic impacts on prices, business models, and competition. It assesses incentives and unintended consequences of stricter rules for online platforms and third parties.
Area of Science:
- Economics
- Law and Economics
- Platform Governance
Background:
- Online platforms face challenges with illegal content and third-party misconduct.
- Platform liability is a frequently discussed regulatory solution.
Purpose of the Study:
- To identify platform incentives to curb online misconduct without liability.
- To economically appraise the effects of platform liability rules.
- To analyze policy measures for online content regulation.
Main Methods:
- Economic analysis of platform liability.
- Assessment of incentives for online platforms.
- Evaluation of intended and unintended consequences of liability rules.
Main Results:
- Platform liability can alter prices, terms, business models, and investments.
- Liability regimes impact platform competition and third-party incentives.
- Analysis of costs and benefits of proposed regulatory measures.
Conclusions:
- Platform liability has complex economic effects on online ecosystems.
- Careful consideration of intended and unintended consequences is crucial for effective regulation.
- Policy discussions should weigh the costs and benefits of various liability measures.
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