The New Public-Private Frontier: Digital Platforms as the New Regulators

Welcome to the latest edition of the #DigitalRegulationSeries, where we explore the intersection of technology, regulation, and policy, with a touch of geopolitics for extra flavor. We explore how tech companies, often unintentionally, are stepping into roles once reserved for governments. From digital platforms acting as rule-makers to private infrastructures enabling governance without government, we’re diving into the growing ambiguity between public and private spheres.

Published every Thursday, this series unpacks the shifting role of tech companies in governance and regulation, shedding light on the evolving relationship between the public and private sectors.

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Digital Platforms as the New Regulators

In recent years, the relationship between governments and tech companies has evolved—not through confrontation, but through circumvention. Rather than waiting for formal regulation, digital platforms have increasingly filled governance gaps by creating their own rule systems. This shift is especially visible in areas like transportation, content moderation, and financial services, where platforms have stepped in with faster, more adaptive frameworks than those offered by traditional public institutions.

Take Uber, for example. In many cities, it has emerged as a central actor in shaping how ride-sharing operates - not by defying regulation, but by building systems that often precede or even inform it. From fare structures to safety standards, Uber has established operational norms that are frequently adopted - or at least acknowledged - by local authorities. In this sense, the platform doesn’t replace regulation; it anticipates and, at times, nudges it.

The same applies to X (formerly Twitter), which has developed content moderation policies in response to legal uncertainty, user pressure, and business imperatives. Its evolving role as a content gatekeeper highlights the complexity of digital governance: companies are navigating spaces where rules are either fragmented or undeveloped, and in doing so, they sometimes end up setting the tone themselves.

It also goes without saying that these companies wouldn't be taking such roles if regulation weren't increasingly inefficient and cumbersome for the digital ecosystem. Platforms and companies don't take on these roles by chance, but rather because they, in most cases, offer cheaper, faster, and rapidly evolving rules that better adapt to the changing nature of technology.

This dynamic raises a different kind of question - not whether platforms are acting in place of governments, but how they are filling in the blanks where traditional regulation hasn’t yet caught up. While this flexibility can foster innovation and responsiveness, it also invites scrutiny: what guardrails exist when private governance becomes too central to public life? And how do we ensure that these emerging norms reflect collective interests rather than corporate priorities?

The Shift in Regulation: Tech Companies as Governance Bodies

The rise of digital platforms as regulators is not just an interesting shift; it’s also a sign of a deeper transformation in how governance is structured. Traditionally, government bodies have created laws and regulations to govern industries, ensuring that markets operate fairly and that public interests are protected. 

Consider Amazon’s role in the global retail market. While it operates under national and local regulations, the platform’s scale and infrastructure allow it to define its own commercial standards across borders. From setting eligibility criteria for sellers to determining logistics protocols and pricing rules, Amazon establishes a layer of governance that functions alongside, and sometimes beyond, state oversight.

This isn’t a case of acting outside the law, but rather of operating in a space where the global logic of digital markets often outpaces the territorial logic of regulation. In that gap, platforms create systems that become de facto standards—not because they seek to replace governments, but because few public institutions can match their reach, speed, or interoperability.

Similarly, Meta, TikTok, and Google have faced increasing pressure to regulate content on their platforms. These companies have developed their own content moderation policies, sometimes in response to government pressure, but often driven by their own interests in managing user experience and preventing misinformation. In many ways, these tech giants are doing what traditional governments would have done in the past, but with no public mandate or democratic oversight.

🌐 On the Radar

Creating regulation on content moderation on TikTok | Wired: Governments are increasingly stepping in to define the limits of platform-led moderation, especially on fast-growing apps like TikTok.

Crypto is not only creating a parallel regulatory system for currencies, but is making a lot of money out of it  | TechCrunch: Bitcoin rose to a new all-time high on Wednesday, reaching almost $110,000, reports CNBC. The high comes amid softer U.S. inflation, a de-escalation in the U.S.-China trade war, and Moody’s downgrade of sovereign debt.

How the old and the new have to keep living together in an antitrust Case | TechCrunch: In an antitrust case that accuses Meta of unfair competitive practices in the purchases of Instagram and WhatsApp, the company argued that it faces plenty of competition, that it helped build the two platforms it purchased, and more.

The traditional banks are migrating to this new regulatory system | The information: Traditional banks are gradually aligning with platform-based rules as fintech reshapes the boundaries of financial regulation.

Challenges and Concerns: Accountability, Power, and Regulation

As platforms assume regulatory power, several challenges arise. One of the most pressing concerns is accountability - the favorite word for political scientists. Unlike government regulators, who are held accountable by the public and can be voted out of office, tech companies are accountable only to their shareholders. This lack of public accountability raises questions about whether these platforms are making decisions in the best interests of society or merely protecting their bottom line.

Additionally, the concentration of power in the hands of a few tech giants is often posed as a significant risk, although, controversially, the "giant" of the day keeps changing. A small number of companies tend to control vast swaths of the digital economy, and their ability to set rules without checks or balances has profound implications for markets, economies, and democracy itself.

This case invites deeper questions about the evolving interplay between innovation and institutional authority. As platforms reshape markets from within, governments are increasingly placed in a reactive role - adapting laws after platforms have already redefined the landscape.

But the challenge isn't simply about who should regulate; it's about how to govern when platforms become infrastructure. What does fair competition look like when platforms are both market players and rulemakers? How can public interest be safeguarded when the first draft of the rules is often written in code, not legislation?

Rather than asking whether companies should shape laws, we must grapple with how societies can build responsive regulatory models - ones that combine the agility of private actors with the legitimacy and oversight of public institutions.

As we move forward...

The question becomes: How do we balance the innovative potential of tech companies with the need for democratic oversight and accountability? The rise of digital platforms as regulators is only the beginning — we’re likely to see even more sectors where tech companies are assuming the roles traditionally held by governments. And as this trend evolves, the question of regulation will continue to be at the forefront of the tech policy debate.

Stay tuned for more insights in the next edition of the #DigitalRegulationSeries, where we’ll explore the growing impact of monopolies in the tech industry and how governments are responding to this emerging power struggle.

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