Platformization of Regulation
Discussion
(version corrected by ChatGPT)
Petter Törnberg:
"As platforms strive to capture control over markets, they increasingly find themselves in competition with the state. As Kitchin (this book) notes, platform firms do not merely supply services to the state or act on its behalf; rather, they seek to assume state-like roles, governing settlements and establishing sovereignty. This dynamic has far-reaching regulatory and political consequences, as platforms exploit institutional weaknesses to evade state control.
One of the clearest examples of this phenomenon is the rise of smart cities, which embody the platformization of regulation. As Kitchin explains, smart cities represent a strategy of capturing public services through technopolitical solutions, shifting urban governance toward a market-oriented model. Platforms profit not only from service contracts with state bodies but also through the extraction of citizen data. The emerging field of “platform urbanism” highlights how cities have become central to platform capitalism, shaping and being shaped by its expansion (Barns, 2020; van Doorn, 2019). Platforms are not merely responding to urban dynamics; they are actively reshaping them, altering the very conditions through which society, space, and time are produced (Kitchin and Dodge, 2011). By leveraging data, platforms remake the city in capital’s image (Couldry and Mejias, 2019).
The recent leak of internal Uber files offers a stark example of how platforms pursue their political goals. The revelations show how Uber exploits regulatory loopholes, mobilizes political and legal power to avoid regulation, and even engages in strategic lawbreaking, bypassing state oversight, and lobbying governments worldwide (Davies et al., 2022). The platform’s expansion strategy hinges on targeting and exploiting local regulatory conditions. Thelen (2018) highlights how Uber’s disruptive impact varies across different countries, as it adapts to each regulatory landscape—whether in Germany, Sweden, or the United States—by identifying loopholes and regulatory grey zones. Like neoliberalization before it, platformization is both novel and contingent, producing diverse outcomes depending on local institutional contexts.
Despite these variations, platforms tend to follow common political strategies, leveraging digital technology to transform regulatory landscapes. A core aspect of their approach is what Morozov (2013) terms “technological solutionism”—the practice of presenting technological fixes for social problems. This allows platforms to displace public and political decision-making with private, technological control. Their strategy aligns with what Hecht (2000) calls "technopolitics": the use of technology as a means to achieve political objectives. While platforms are often described as technology entrepreneurs, Pollman and Barry (2016) argue that they are, more accurately, regulatory entrepreneurs. For them, technological innovation is not just a byproduct of their business model—it is the very mechanism by which they pursue regulatory power.
Rapid expansion is another defining feature of platform strategy. Fueled by massive venture capital investments, platforms aggressively undercut competitors and build user bases at unprecedented speed (Langley and Leyshon, 2017). While this is often seen as a competitive tactic against other platforms, it also serves as a strategy vis-à-vis the state. By scaling quickly, platforms amass political and legal power, hire lobbyists and legal teams, and mobilize their users as political agents (Collier et al., 2018; van Doorn, 2019; Culpepper and Thelen, 2020). Once embedded in a market, their rapid expansion presents lawmakers with a fait accompli, making after-the-fact regulation difficult to enforce (Srnicek, 2016).
eyond regulatory evasion, platforms seek to entrench themselves as indispensable infrastructure, embedding their operations within the state, regulatory agencies, and political institutions. As van Dijck et al. (2018) argue, platforms have become the "infrastructural core" of the global digital economy, making them central players in geopolitical conflicts. Increasingly, they serve as “key pawns in a mounting hegemonic strife” (Bassens and Hendrikse, 2022), particularly between the U.S. and China. Consequently, states themselves have begun to support platformization as a tool of geopolitical influence (Peck and Phillips, 2020).
To avoid taxation and regulation, platforms often frame themselves as mere intermediaries facilitating market transactions rather than as active economic agents. This narrative of neutrality allows them to sidestep legal responsibilities, despite exerting substantial control over markets through data extraction and infrastructural design. Labor platforms such as Uber and MTurk, for instance, use algorithmic management to claim that their workers are "independent contractors" rather than employees, thus avoiding labor protections and welfare obligations (Cheney-Lippold, 2011; Ravenelle, 2019). Similarly, short-term rental platforms like Airbnb argue that they merely connect guests with hosts, enabling them to bypass hotel regulations and shift tax and legal responsibilities onto individual users (Törnberg, 2021). This strategy—employed across social media, gig work, and other digital sectors—allows platforms to operate in regulatory grey zones while maintaining a facade of neutrality (van Dijck and Poell, 2013).
At the same time, platforms do not simply evade regulation; they also act as legal and political shields for their users. For example, Airbnb has actively obfuscated host identities to prevent governments and tax authorities from enforcing regulations. The company has also engaged in significant lobbying efforts, sued governments, and even mobilized its users into political movements to resist stricter oversight (van Doorn, 2019). In doing so, platforms seek to carve out their own regulatory domains, effectively "unnesting" their proprietary markets from broader public oversight. This allows them to impose their own rules and taxation structures, mirroring the authority of sovereign states.
Ultimately, platformization represents a new form of accumulation based on rent-seeking and regulatory capture, in which data power is leveraged to monopolize governance. As Kitchin (this book) notes, this process transforms the state into a privately owned "state-as-a-platform," where corporations control all aspects of urban governance, from territory and infrastructure to service delivery and regulation. Platforms, in this sense, are not just economic actors—they are technopolitical forces, using digital technologies to consolidate control over public life. Through algorithms and vast behavioral data, governance itself is depoliticized and privatized, reframing social issues as technical problems to be solved through proprietary means."
Source
* Article / Chapter: Platforms as States: The Rise of Governance through Data Power. By Petter Törnberg. In book: Data Power in Action.