Optimal Economic Regulation of the Online Platforms

Nowadays, online platforms are known as Internet intermediaries in consumer-seller relationships. These platforms, as independent economic actors, play an essential role in making transactions between individuals, contractual terms and even determining the price of goods and services in the WEB. The considerable impact of these platforms on the related market, the network effects, the negative externalities and the public access to these platforms have attracted the attention of regulators to this emerging phenomenon. Using economic indicators and legal instruments, this paper tries to examine the behavior of consumers, sellers and Internet platforms in order to present the optimal economic regulation. Based on our findings, contrary to bureaucrats’ beliefs, platforms are considered as one of the most important regulators of markets due to their technical capability and motivation to build trust and transparency in the platform. However, the role of government regulation should not be overlooked in cases such as network externalities and monopolistic situations.