User Scale,User Types And Internet Platform Competition

With the application and popularization of internet,platform economy has achieved rapid development and becomes a hot economic field gradually.The rise of large platforms has promoted the reform and remolding of modern economy.At present,China's economy is at a critical stage of transformation and upgrading.As a new way of organizing productivity,internet platform economy is a new driving force for economy development and plays an important role in optimizing resource allocation and promoting cross-market and integrated development.With the progress of information technology,the advantages of internet platforms in saving transaction costs and improving matching efficiency can be brought into play.Under the influence of cross-group externality,the platform with larger number of users will gain competitive advantages,and the user scale has became one of the key factor of the platform competition.With the evolving of platform competition modes,user type advantages,or the ability to satisfy user's personalized and diversified needs become another key element of platform competition.The competition covering the two dimensions of user scale and user types has become the direction and key for internet platforms to enhance competitive advantages.With the emergence and rapid development of new platforms,the competition mode of users tends to be diversified.However,the technological progress has not solved the contradiction between platforms' pursuit of profits and market supervision,and the problem of market failure still exists in the platform economy under the background of internet.Some user competition modes have caused controversies,even antitrust litigation.Domestic cases such as the "Ride-hailing subsidy dispute" which triggers the dispute of whether user subsidies disrupt market fairness and competition.Foreign cases such as the "Apple e-book case",in which the US Department of Justice accused Apple Inc of manipulating the price of e-books."Google Shopping case",in which the European Union accused Google Inc of abusing its dominant position in the search market.The focus of these disputes or antitrust litigation is whether internet platforms distorted the market competition mechanism in the user competition,some of these platforms,such as Google,have been judged by antitrust authorities as abusing market power and have been fined.Through literature study,it is found that the academia has done a lot of researches on the impact of platform user competition.However,the existing researches on these issues are not deeply enough on analyzing the reasons of platform competition combined with user scale and user types,discussing the mechanism of increasing user scale and user types to improve the competitiveness of platforms,and reveal the reasons of suffering antitrust disputes and antitrust lawsuits in user competition etc.The research of these problems can further enrich and develop the theoretical research of two-sided markets,and provide reference for market regulators to adjust the understanding and supervision logic of the platform.Therefore,the study of platform user competition has certain theoretical and practical significance.This dissertation studies the production and consumption of platform services based on cross-group externality,under the two-sided markets theory framework.Which reveals the underlying reasons of user competition of platforms,and explores the influence on platform and competition of user scale and user type competition.This dissertation studies the user competition of platforms from four aspects:Firstly,based on the comparison of internet platform economy and traditional economy,summarizing the unification rule of the production process and consumption process of platform services.Through analyzing the unification rule of market-maker platforms,audience-maker platforms and demand-coordinator platforms,exploring the source of economy of scale and economy of scope,and summarizing the underlying reasons of platforms' engaging in user competition.Secondly,this dissertation discusses the influence of expansion of user scale on platforms' pricing level,and studies the influence of "user subsidy","user migration"and "platformization" on user scale.By collecting and collating the relevant data of user scale competition,this dissertation makes an empirical study on the relationship between user scale and profitability.Using conclusions of theoretical analysis and empirical test to the analysis of user scale competition cases in order to support and enrich the researches.Thirdly,this dissertation discusses the influence on profitability of increasing user types,and the limitations of the user type competition by user type costs.Through collecting and collating relevant data of "Google-YouTube","Microsoft-Linkedln","NetEase-koala",etc,this dissertation makes empirical analysis of platform income under user type competition through event study.Using conclusions of theoretical analysis and empirical test to the analysis of user type competition cases in order to support and enrich the researches.Fourthly,based on the characteristics of cross-group externality,this dissertation explores the reasons why platforms are prone to abuse market power in user type competition.On this basis,this research analyzes the specific cases such as "Google Shopping case" and "Google operating system case",interprets the abuse of market power by platforms in order to support the conclusions of the study.This dissertation is divided into eight chapters.Chapter 1 is the introduction.Chapter 2 is the literature review.Chapter 3 analyzes the role of users in the production and consumption of platform services based on cross-group externality,and explores the reasons for user competition of platforms.Chapter 4 explores the motivation and mechanism of user scale competition in platforms,and discusses the role of "user subsidy","user migration" and "platformization" in expanding user scale.Chapter 5 explores the motivation and mechanism of user type competition in platforms,analyzes the restrictive factors of user type competition,and the reasons of platforms abusing market power in user type competition.Chapter 6 makes empirical research on the user scale and user type competition on the basis of chapter 4 and 5.To support the conclusion of the previous studies,Chapter 7 analyzes the relevant cases based on the theoretical analysis and empirical research.Chapter 8 summarizes the conclusions of the dissertation and puts forward the corresponding policy recommendations.The main conclusions of this paper are as follows:Firstly,the participation of users makes the production process and consumption process of the platform come into being at the same time,the lack of any side of user will make the platform losing the resources to be matched,and the platform will also lose the value of existence.User is the key to platform competition.Platforms expand user scale and add user types can reduce platform costs and users costs of time and selection,strengthen the advantages of user scale and user types with a massive match and multi-sided service under cross-group externality,and form economy of scale and economy of scope which based on users,and make the platform improve profitability.Secondly,under the effect of cross-group externality,platforms increase users can expand the matching trading range of all sides,promote to form large matching trading volume,and form economy of scale,improve the operating performance of the platform.Internet platforms can rapidly expand user scale through many ways,the typical ways such as "user subsidy","user migration" and "platformization".Platforms have to suffer profit loss which squeezed out by subsidies when using "user subsidy",with the accumulation of subsidys,the expanded user scale may increase the profit level."User migration" can make the platforms reach the critical-mass in a short time,and then expand the user scale on both sides of the platforms under cross-group externality and direct network externality,share key resources of the platform,and form economy of scale.Thirdly,platforms can enrich the service contents and expand service scope by increasing user types,and form economy of scale and economy of scope under cross-group externality and user-type externality,but this process will be restricted by the cross-market costs.The greater the cross-group externality of the new user type,the larger matching transaction scale the platforms can form,the cross-market difficulty is lower.When the cross-market costs is high,the contribution of the user type to the profit is low,and even a loss.Therefore,the user type needs to be selected by accounting the cross-group externality and cross-market costs,and cannot be increased infinitely,otherwise platforms will be trapped in costs,or even losing competitive advantages.Fourthly,the motivation of reducing the costs of user type competition deepens the trend of market power abusement to enhance the competitive advantage of user types.Binding,exclusive agreements or other behaviors can enable platforms to realize the transmission of market power among different markets with the help of leverage effects in user type competition,reduce the restriction of user type on economy of scale and economy of scope,and promote cross-market competition to transform into cross-market monopoly gradually.With the progress of internet technology,the way of user type competition in platforms tends to be diversified,and because the user type competition usually involves multiple markets,if only focusing on the competitive behavior,competition process and results of one market,the hidden behaviors of abusing market power will not be easily found.The main innovations of this dissertation are as follows:Firstly,this dissertation analyzes the competition of internet platform combining user scale and user types factors,explains the mechanism of user scale and user type competition to promote the competitive advantage.Based on the theory of two-sided markets,reveals the platform expand user scale and add user types can reduce costs of platform services,and user costs of time and selection,strengthen the advantages of user scale and user types with a massive match and multi-sided service under cross-group externality and user-type externality,then form economy of scale and economy of scope which based on users.This research specified the key role of user for platform competition.Secondly,this dissertation reveals the mechanism of typical mode of user competition influence user scale,including "user subsidy","user migration" and"platformization",and clarifies the impact and restriction of cross-group externality and cross-market costs in cross-market competition.Through the research on user scale competition,this dissertation summarizes three typical mode of user competition,explains the process of reaching the critical-mass and overcoming coordination difficulties,and then reveals the process and mechanism of obtaining user scale advantage of platforms.Through theoretical and empirical research to user type competition,this research finds cross-group externality and costs of user type competition,which influence the profitability of platform after user type competition,and restrict the space and scope of user type competition.Thirdly,from the perspective of market regulation,this dissertation reveals the internal causes of abusing market power in platform user competition,and puts forward a regulatory logic combining prudent supervision and timely control of platform economy.Through theoretical and case research,this dissertation reveals the mechanism that platform can reduce the cost of cross-market competition by abusing market power in user type competition,and the process that platform can build entry barriers or obtain monopoly position by means of user scale competition such as subsidies will hinder fairness and competition.This dissertation puts forward the principles or logic that should be followed in the regulation of platform economy,on one hand,in order to give fully play to the efficiency superiority of platform economy,it needs prudent regulation and avoids excessive intervention.On the other hand,it is necessary to continuously track and pay attention to the competition behavior of platform users and carry out anti-monopoly control timely to maintain the fairness of the market.