Temporal Shifts in the Power of Users, Business, and States on Digital Platforms

• In Event: Digital Platforms, Freedom of Speech, and Power

Abstract

Under what conditions are user-generated digital content platforms responsive to pressures from users, businesses, and states? This paper proposes that digital platforms show different levels of responsiveness to users, businesses, and states over time. Early in a platform’s life, the platform is highly sensitive to the demands of users, thus giving the users an opportunity to directly shape the institutional characteristics of the platform. The unique power of the platform’s users stems from the network logic that underpins the value of the platform. As the platform increases the size and centrality of its network, it becomes more sensitive to pressures by businesses (through boycotts) and the state (through intervention). At the same time, the power of users attenuates, as collective action problems become more severe and exit threats become less credible. The threat of user revolts has a temporal significance. Unless users alter the institutional architecture of the platform and lock in pro-user institutional characteristics early, the threat of user revolts becomes less consequential as the platform grows. Comparative case studies of Facebook, Wikipedia, Digg, and Reddit are consistent with the theory.

Author

• Sverrir Steinsson, University of Toronto