TRANSCRIPT - When is a business a platform?

This is the edited transcript of the Competition Lore podcast episode 2, with Professor Dick Schmalensee.

You can purchase a PDF download of the complete transcript of this podcast for US$10.

Many of us use the term "platform" on a daily basis to describe businesses that we connect with online. But when and how does a business act as a platform? And what difference does this make to platform users, whether as consumers or other businesses that sell or advertise products and services on it?

Professor Dick Schmalensee has been studying platforms since at least the 1980s. He says the simplest definition of a platform is a business that brings different sides together. It's an old model but one supercharged by the tech-revolution, and it's getting attention from many authorities around the world. The first challenge though is to understand just what they are dealing with.

In this episode of Competition Lore, Professor Schmalensee defines the platform business model and explains how their network effects work, making them attractive to users but also potentially challenging for competition law enforcement.