The Cooperation Paradox

Eric Clemons (), Maximilian Schreieck (), Sebastian Hermes (), Frantz Rowe () and Helmut Krcmar ()
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Eric Clemons: University of Pennsylvania
Maximilian Schreieck: LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université, TUM - Technische Universität Munchen - Technical University Munich - Université Technique de Munich
Sebastian Hermes: TUM - Technische Universität Munchen - Technical University Munich - Université Technique de Munich
Frantz Rowe: LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université, SKEMA Business School
Helmut Krcmar: TUM - Technische Universität Munchen - Technical University Munich - Université Technique de Munich

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Abstract: Dominant American online platforms like Amazon Alexa or Google Assistant have become Life Control Interfaces (LCIs), which facilitate consumers' online interactions and influence what consumers do and do not see and buy. These platforms operate outside of EU regulation, and create significant costs for traditional European firms in a wide range of industries. These platforms can reduce firms' access to customers, can charge for enabling access to customers, or can charge for access to essential data on firms' customers. Since these platforms enjoy monopoly power there is little restraint on their charges, which indirectly increase consumers' prices. We propose that regulators encourage the formation of a consortium to offer a single integrated EU-based Life Control Interface (EuLCI). This consortium would increase the number of EuLCIs from zero to one, and thus would actually increase consumer choice. We call cooperation that enhances rather than limits choice The Cooperation Paradox.

Keywords: Life control interfaces; Online competition; Online cooperation and consortia; Online gateways; Online monopoly regulation; Online platform regulation JEL classification D40 (search for similar items in EconPapers)
Date: 2022-03-15
New Economics Papers: this item is included in nep-com, nep-pay and nep-reg
Note: View the original document on HAL open archive server: https://hal.science/hal-04473840v1
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Published in Electronic Markets, 2022, 32, pp.459 - 471. ⟨10.1007/s12525-022-00534-2⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04473840

DOI: 10.1007/s12525-022-00534-2

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