Blog Post Digital Platforms

The recent surge in Digital Platform Regulations raises essential questions about their true aim. While governments strive to enhance consumer rights by imposing protection mechanisms, could underlying goals be at play?

Here are a few insights (3-minute read).

These regulations generally apply to marketplaces, social networks, app stores, and online travel and accommodation platforms (it seems to all). They aim to protect consumer rights and prevent fraud, illegal goods, data breaches, and leaks. However, there may also be an implicit goal of re-establishing centralised control.

Even without a centralised global mechanism, countries enforce platform regulations based on their regimes. These measures will also affect local user experience and access, influencing the global internet’s openness.

In some regions, the target is only large platforms (e.g., EU). However, most countries do not distinguish operational volumes, focusing on report metrics such as privacy, risk mitigation, online advertising, fraud and illegal goods, workers’ rights, customer complaints, annual turnovers, etc. (e.g. TH, SG). 

Large companies can easily dedicate staff and investments to filing free-of-concern reports. Meeting these requirements is a significant burden for small and medium-sized enterprises, affecting their focus on growth. 

Additionally, such data collection enables the creation of a detailed database, a new tool that effectively serves governments in monitoring business performance and imposing penal measures (if they want). 

Fines can cost a percentage of annual global turnover or result in anticipated revenue loss if a platform is suspended. Only big market players can mitigate risks facing penalties while still becoming subject to intensified monitoring. However, there is always room for a breach, often unknowingly, unless you hire lawyers in every jurisdiction, which is also not an optimal protective approach.

So, prepare if your platform operates cross-border.

Here are some tips for better protection and peace of mind:

• Stay updated on global regulatory trends.
• Monitor regional regulations and understand the applicable measures (e.g., independent approach, extensive monitoring, strict custody).
• Identify key regulatory areas (e.g., privacy, consumer rights, manpower, fraud) to address specific vulnerabilities.
• Track infringement cases and penalty statistics to assess risk impacts and likelihood.
• Gather analytics on business activities using a cross-departmental approach. 
• Implement analytical tools for easy access to region-specific data.
• Narrow reporting on activities in a specific jurisdiction; it’s better to disclose less than to overshare.
• Compare, analyse, and evaluate by establishing a clear policy for assessing each risk based on your company’s performance and vulnerabilities in a particular jurisdiction.