Can the EU Regulate Platforms Without Stifling Innovation?

Carmelo Cennamo, D. Daniel Sokol

Research output: Contribution to journalJournal articleResearchpeer-review


When it comes to regulating data and the growing power of tech companies, Europe is the global test case. While the EU is the model for other countries, it is also a cautionary tale of the unintended consequences of applying broad regulatory fixes to a rapidly evolving landscape, and the recently proposed Digital Markets Act, which targets platforms, is no exception. New rules on how data can be used and combined, and how digital platforms direct consumers, may end up stifling competition and innovation — a bad outcome for both consumers and companies. To avoid this outcome, regulators should follow four guiding principles: 1) preserving business model innovation should be the top priority; 2) regulators should focus on why ecosystems are competitive, not on who is winning; 3) stay focused on fostering market contestability in adjacent segments; and 4) regulators should hold companies accountable, but not tell them what to do.
Original languageEnglish
JournalHarvard Business Review Digital Articles
Number of pages8
Publication statusPublished - 19 Mar 2021

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