This chapter answers the question: what is an internet platform, anyway? Why is it special? The definition focuses on the network characteristics of internet services that leverage positive network externalities to grow to an immense scale, permit a high degree of behavioral novelty and diversity, and operate under an economic model that profits primarily by taxing the activity thus promoted (including by taxing user attention). This is analogized to the basic operating model of political states.

This chapter evaluates the applicability of the natural monopoly framework in digital platform markets. It starts by discussing the role of technological change in fostering concentrated market structures in digital industries and by evalauting the policy implications that should be derived from the economic literature on multisided platforms. On that basis, it then identifies the general conditions that may give rise to a natural monopoly platform.

This chapter discusses the EU’s payment and post-trading (i.e. securities clearing and settlement) systems. Over the past decade, the volume and value of transactions that are processed via these systems have grown tremendously. Stable and efficient payment and post-trading systems have become very important for the operation of financial markets and the economy in general. For a long time, these infrastructures were fragmented along national lines and were exposed to limited competition. But integration is continuing in the context of the single currency, the Single Euro Payments Area and technological innovations. The chapter starts by examining the different elements of (retail and wholesale) payment and post-trading systems. The second part of the chapter gives an overview of the economic features of the payment and securities market infrastructures. The third part of the chapter describes the current situation in the payment and post-trading industry and recent initiatives to promote further integration, and addresses weaknesses exposed by the financial crisis.