The Economics of Platform Liability

Yassine Lefouili and Leonardo Madio
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Leonardo Madio: Unipd - Università degli Studi di Padova = University of Padua

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Abstract: Public authorities in many jurisdictions are concerned about the proliferation of illegal content and products on online platforms. One often discussed solution is to make the platform liable for third parties' misconduct. In this paper, we first identify platform incentives to stop online misconduct in the absence of liability. Then, we provide an economic appraisal of platform liability that highlights the intended and unintended effects of a more stringent liability rule on several key variables such as prices, terms and conditions, business models, and investments. Specifically, we discuss the impact of the liability regime applying to online platforms on competition between them and the incentives of third parties relying on them. Finally, we analyze the potential costs and benefits of measures that have received much attention in recent policy discussions.

Keywords: Liability rules; Online platform; Illegal content and products; Intellectual property (search for similar items in EconPapers)
Date: 2022-06
New Economics Papers: this item is included in nep-com, nep-law, nep-mic, nep-pay and nep-reg
Note: View the original document on HAL open archive server: https://hal.science/hal-03711652v1
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Citations: View citations in EconPapers (9)

Published in European Journal of Law and Economics, 2022, 53 (3), pp.319-351. ⟨10.1007/s10657-022-09728-7⟩

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Journal Article: The economics of platform liability (2022)
Working Paper: The Economics of Platform Liability (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03711652

DOI: 10.1007/s10657-022-09728-7

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