Content Moderation and Competition in Digital Markets

In this contribution we look at the upcoming changes in the EU platform regulation. More specifically, we focus on the Digital Services Act (“DSA”) from the competition perspective. The DSA is less frequently discussed from this perspective compared to its companion regulation: the Digital Markets Act (“DMA”), which explicitly aims to increase contestability of digital markets. We argue that the DSA, via the modification of liability rules for the platforms, may also bring competitive effects to the platform economy. To set the scene we discuss why an update of liability regime was necessary in the first place. Then we conjecture how platforms may adapt to the new rules and argue that more content screening can be expected. Finally, we hypothesize how the DSA may affect competition between large and small platforms via changes in content curation behavior. We sketch conditions under which the existing differences in size between the platforms could decrease leading to a more balanced market landscape.

By Maciej Sobolewski & Néstor Duch-Brown^[1]

I. INTRODUCTION

The past 20 years or so have witnessed the rapid development of novel digital services, based on the notion of the social web or Internet 2.0. This innovation in the way digital content was generated and consumed has provided abundant value to consumers and at the same time has allowed the emergence of new firms and business models that have completely changed the competitive landscape of digi