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From platform dominance to weakened ownership: how external regulation changed Finnish e-identification

Author

Listed:
  • Anar Bazarhanova

    (Aalto University)

  • Jesse Yli-Huumo

    (Aalto University)

  • Kari Smolander

    (Aalto University
    Lappeenranta University of Technology)

Abstract

Background There is substantial interest among scholars in digital platforms and the ecosystems around them. Digital platforms are open, continuously evolving, sociotechnical structures that can be sensitive to various changes. Aim We take one-step further and investigate the post-dominance phase of platforms. The electronic identification (eID) ecosystem in Finland provides a good example of ecosystem transformation due to external changes from EU and national regulation. Method We engage in an extensive case study of a nation-wide monopolistic eID platform. We first take a retrospective view to understand the historical context and then examine in detail how an external driver leads to changes in the ecosystem. Results We explicate the platform evolution process, from a phase of dominance with centralized control structures to a more federated governance approach. We find that the introduction of intermediaries between the platform and its users contributes to a weakening of the dominant platform owners. Conclusion This finding that platforms can transform into industry infrastructures has an important implication for our understanding of the dynamics underlying digital platforms.

Suggested Citation

  • Anar Bazarhanova & Jesse Yli-Huumo & Kari Smolander, 2020. "From platform dominance to weakened ownership: how external regulation changed Finnish e-identification," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(3), pages 525-538, September.
    • Handle: RePEc:spr:elmark:v:30:y:2020:i:3:d:10.1007_s12525-019-00331-4
    DOI: 10.1007/s12525-019-00331-4
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    References listed on IDEAS

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    1. Kevin J. Boudreau & Andrei Hagiu, 2009. "Platform Rules: Multi-Sided Platforms as Regulators," Chapters, in: Annabelle Gawer (ed.), Platforms, Markets and Innovation, chapter 7, Edward Elgar Publishing.
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    4. Mark Armstrong Author-Email: mark.armstrong@ucl.ac.uk Author-Workplace-Name: University College of London, 2006. "Competition in Two-Sided Markets," RAND Journal of Economics, The RAND Corporation, vol. 37(3), pages 668-691, Autumn.
    5. Panos Constantinides & Ola Henfridsson & Geoffrey G. Parker, 2018. "Introduction—Platforms and Infrastructures in the Digital Age," Information Systems Research, INFORMS, vol. 29(2), pages 381-400, June.
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    Cited by:

    1. Medaglia, Rony & Eaton, Ben & Hedman, Jonas & Whitley, Edgar A., 2022. "Mechanisms of power inscription into IT governance: lessons from two national digital identity systems," LSE Research Online Documents on Economics 108207, London School of Economics and Political Science, LSE Library.
    2. Nguyen, Phong Thanh & Nguyen, Linh Thi My, 2022. "Understanding platform market value through decentralization governance — An integrative model from signaling and mechanism design theory," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    3. Laurin Arnold & Jan Jöhnk & Florian Vogt & Nils Urbach, 2022. "IIoT platforms’ architectural features – a taxonomy and five prevalent archetypes," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(2), pages 927-944, June.
    4. Simon Michalke & Lisa Lohrenz & Christoph Lattemann & Susanne Robra-Bissantz, 2022. "Exploring engagement, well-being, and welfare on engagement platforms: Insight into the personal service sector from the DACH region," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(4), pages 2429-2444, December.
    5. Rainer Alt, 2020. "Electronic Markets on business model development," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(3), pages 405-411, September.
    6. Carolina Costabile & Jon Iden & Bendik Bygstad, 2022. "Building digital platform ecosystems through standardization: an institutional work approach," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(4), pages 1877-1889, December.

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    More about this item

    Keywords

    Industry platforms; Platform ecosystems; Platform evolution; Platform dominance; Digital infrastructrues;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • L - Industrial Organization

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