The Cooperation Paradox

Eric K. Clemons (), Maximilian Schreieck (), Sebastian Hermes (), Frantz Rowe () and Helmut Krcmar ()
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Eric K. Clemons: University of Pennsylvania
Maximilian Schreieck: Technical University of Munich (TUM)
Sebastian Hermes: Technical University of Munich (TUM)
Frantz Rowe: Nantes Université, LEMNA, Institut d’Administration des Entreprises
Helmut Krcmar: Technical University of Munich (TUM)

Electronic Markets, 2022, vol. 32, issue 2, No 7, 459-471

Abstract: 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 (search for similar items in EconPapers)
JEL-codes: D40 K24 L86 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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DOI: 10.1007/s12525-022-00534-2

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