Intellectual property and taxation of digital platforms

J. Manuel Sánchez-Cartas

Journal of Economics, 2021, vol. 132, issue 3, No 1, 197-221

Abstract: Abstract I study the impact of ad-valorem and unit taxes on the intellectual property policies of two-sided digital platforms. First, I address the monopoly case, in which I show that the effects of taxes depend on which side they are levied on. If developers are taxed, I find that ad-valorem taxes reduce the platform openness and the exclusivity period granted to developers to exploit their innovations. The opposite is true when taxes are levied on users. On the other hand, the effect of unit taxes is ambiguous in general. Then, I extend the model to address the duopoly case, and I find that competition may increase welfare, but it is not guaranteed. The effects of taxes on welfare are similar in both regimes. In general, they are ambiguous, but I characterize those cases which are welfare-enhancing unambiguously. I conclude highlighting the potential impact of the Digital Service Tax (DST) proposed by the European Commission on platform openness and digital innovation in Europe.

Keywords: Two-sided markets; Digital platforms; Taxation; Intellectual property; Openness (search for similar items in EconPapers)
JEL-codes: H22 L13 L51 L86 O34 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s00712-020-00717-5 Abstract (text/html)

Related works:
Working Paper: Intellectual Property and Taxation in Digital Platforms (2019)
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:kap:jeczfn:v:132:y:2021:i:3:d:10.1007_s00712-020-00717-5

DOI: 10.1007/s00712-020-00717-5

Access Statistics for this article

Journal of Economics is currently edited by Giacomo Corneo

More articles in Journal of Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().