Safety as Strategy: Consumer Protection and Platform Leakage

Ehsan Sabzizadeh (), Ulrich Laitenberger () and Florian Pethig ()
Additional contact information
Ehsan Sabzizadeh: Tilburg University, Tilburg, Netherlands
Ulrich Laitenberger: Tilburg University, Tilburg, Netherlands
Florian Pethig: Tilburg University, Tilburg, Netherlands

No 26-07, Working Papers from NET Institute

Abstract: Platforms often justify new rules as consumer protection. When such a rule governs infrastructure that rival marketplaces depend on, it can make trading on those rivals riskier while leaving the platform's own marketplace unchanged, and can thus work against platform leakage. We study Valve's Trade Protection policy of July 2025, which made peer-to-peer transfers of Counter-Strike~2 items reversible for seven days while exempting purchases on Steam's own Community Market; third-party marketplaces complete every sale through such a transfer while settling the payment on their own platforms. Using item-week data from Steam and two third-party marketplaces, CSFloat and MarketCSGO, we estimate a difference-in-differences model that compares trading around the policy date with the same calendar weeks in 2024. Trading volume on the third-party marketplaces fell by about half and did not return to its pre-policy level within our window, while Steam's number of trades did not rise. Both results hold in a regression discontinuity in time, and the Steam result also holds when other Steam games serve as controls. Steam's turnover, however, rose by 18 to 24\%, with volume gains concentrated among high-price items and items with a high pre-policy share of third-party trading. The policy thus shifted high-value trading toward the focal platform, while much of the lost third-party trading was not absorbed by Steam.

Keywords: Platform governance; digital marketplace; platform leakage; cross-platform spillovers (search for similar items in EconPapers)
JEL-codes: D43 L22 L86 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2026-09
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.netinst.org/Pethig_26-07.pdf (application/pdf)
no

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:net:wpaper:2607

Access Statistics for this paper

More papers in Working Papers from NET Institute
Bibliographic data for series maintained by Nicholas Economides ().