The Code of the Platform

Abstract

Digital platform-based businesses such as Uber, eBay, and Google have become ubiquitous in our daily lives. They have done so by expertly harnessing technology to bring supply- and demand-side users together for commercial and social exchange. Users are happy to let these platform companies play “matchmaker” because transaction costs are lowered—it is easier to find or give a ride, buy or sell a product, or obtain almost any kind of information than ever before—and platforms are happy to be at the center of the exchange, taking advantage of network effects to become wildly successful. Despite the success of these platforms, however, there is an increasing unease with the methods that platforms use to sustain their multi-sided markets—namely, users question whether they are being manipulated by some of their favorite companies. This Article offers a first-of-its kind analysis into both the legality and ethicality of platform companies, specifically their use of technologically enhanced behavioral science to mediate user transactions. After providing a descriptive account of how platform companies operate and succeed, including an in-depth analysis of the choice architecture platforms employ to structure almost every decision made on the platform, this Article evaluates whether platforms manipulate users. Various activities of platform companies are assessed and charted on a platform manipulation matrix as part of an integrated framework that evaluates the autonomy costs platforms impose upon users. Once done, it becomes clear that much of what platforms do is indeed manipulative; yet much is also beneficial to users and companies alike. This Article then offers a path forward: an ethical foundation to be used by platforms, users, and regulators aimed at reducing manipulative practices—a new Code of the Platform.