Sustainability of Digital Platforms under the Impact of Economic Regulation and Voluntary Withdraw from the Domestic Market: Lessons for Competition Policy

Svetlana Bovt (National Research University Higher School of Economics)
Svetlana Avdasheva (National Research University Higher School of Economics)
Anna Golovanova (National Research University Higher School of Economics)

Abstract

The sustainability of digital platforms has become a global concern for policymakers and regulators. However, there is limited empirical assessment of the effects of policy interventions on the digital platforms. This article examines the sustainability of different types of digital platforms (browsers, search engines, and social media platforms) under sector-specific protectionist policies and the voluntary withdrawal of international platforms from the Russian market. The unique context of the Russian market allows for an analysis of the impact of public intervention on digital platforms. Utilizing the cosine index for vectors of digital platforms' market shares of time periods, we provide quantitative results of market structure changes. The study highlights the importance of differentiated regulatory approaches for different types of platforms, as regulatory measures targeting browsers and search services have limited impact on market structure, while those aimed at social media platforms can lead to significant redistribution of attention and market shares.

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