321 / 2024-04-24 13:08:36

The Effects of Competition on Platform Content Regulation

content regulation,platform competition,two-sided platform,social welfare,content provider

With the increasingly critical role online content platforms play in people’s information acquisition, users are increasingly clamoring for high-quality content. Meanwhile, worldwide governments attach more attention to the supervision of platform content provision. In response, abundant platforms have started to introduce platform-scale content regulation policies. However, alongside the improvement of content quality, stringent content regulation disincentivizes content providers. Furthermore, fierce competition with counterparties urges platforms to cautiously handle the regulation decision-making, which has been scarcely discussed before. Hence, we construct an economic model in a multi-platform environment to investigate the optimal content-regulation level and the influencing mechanism of competition intensity on platforms’ decision-making. Analytical results reveal that platforms will execute content regulation only when the unit positive utility it posed on consumers overweighs the unit negative utility on content providers. As a growing number of platforms intensifies the competition, we find that platforms will choose to relax the content regulation in most cases, except for some special circumstances where they strengthen the level. Moreover, we find that platforms can overcome content regulation's adverse effects on content providers and utilize a “win-win-win” outcome by pricing adjustment. Finally, the examination from the social welfare perspective reveals that platform regulation can lead to a reduction in overall welfare in specific cases, offering new insights for regulators in platform content supervision.