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Disrupting Regulation? State Capacities in the Digital Platform Economy

The rise of digital platforms for sharing, swapping, or renting goods and services has fundamentally transformed the ways in which people, capital, and labor circulate. In the growing literature on this phenomenon of the platform economy, many authors have taken the stance that this ongoing process of 'platformization' not only leads to a complete restructuring of various markets, but also to a 'disruption' of governmental state capacities. According to these scholars, the fact that platforms such as Airbnb or Uber operate globally and transcend national jurisdictions creates far-reaching legal uncertainty that would ultimately render traditional regulatory approaches toothless. The state and its regulatory instruments are therefore considered unable to solve the challenges of today's globalized economy.

Empirical studies supporting this claim, however, are scant. By analyzing and comparing the intended and unintended consequences of so-called “Anti-Airbnb Laws” in New York City, Berlin and Barcelona, the chapter provides evidence to the contrary. Far from being “disrupted,” it shows that the difficulties of implementing and enforcing regulations in the platform economy do not derive so much from the techno-legal structure of digital platforms, but from a struggle between interest groups within state apparatuses on how to adequately govern the flows enabled by the emergence of digital platforms.

While on the surface it might therefore seem as if digital platforms are indeed fundamentally challenging state capacities, the chapter demonstrates that the regulatory problems associated with the rise of the platform economy are primarily of a political nature. As such, it argues that it is not the techno-legal structure of platforms that disrupts the regulatory capacity of the state, but the particular social relations in which these technologies are embedded.