DIGITAL PLATFORMS AS A CONDITION FOR INCREASING INNOVATION AND COMPETITIVENESS OF SMALL AND MEDIUM ENTERPRISES IN THE EU
Authors: Shvorak Liudmyla , Humeniuk Yaroslav 
Published: November 2024

The purpose of the study is to consider the potential of digital platforms as an environment for the formation of new types of relationships to promote the development of innovation and competitiveness of small and medium-sized enterprises in the EU. The main goal of digitalization, as defined in the normative documents of the European Commission, is to improve the use of the potential of information and communication technologies to promote innovation, support economic development and stimulate scientific and technological progress in general, and ultimately contribute to the formation of “smart”, sustainable and inclusive growth of the region’s economy A set of important measures is already being implemented and developed. Among them, the creation of a single digital market, which is considered as a primary goal of the European Commission strategy to ensure guaranteed access to online activities for citizens and businesses in a fair competitive environmen. Measures are being taken to reduce the cost of intercountry shipping of goods purchased online, the prices of which are 3-5 times higher than those for transactions carried out within individual countries. In order to enable the digital transformation of European industry and services, particular attention will be paid to the development of cross-sector, integrated digital platforms and large-scale pilot platforms for experimentation and co-creation with users. We define a digital platform as an organisation that offers digital services facilitating interactions between two or more different but interdependent groups of users (suppliers and individuals) via the Internet and that generate network effects. The following are characteristics of a systemically important digital platform: operating in a majority of EU countries; having significant influence on the internal market, namely the annual turnover of a group of companies; the ability to connect a large number of users with a large number of suppliers of goods (services), namely more than 45 million monthly active users located in the EU, or more than 10,000 commercial users located in the EU in the last financial year); having established economic power and stable income from intermediary services provided in the EU. In the presence of indirect network effects, the volume of demand for the platform's services will depend, among other things, on the price level and the economic model of the ecosystem. Also, when developing the EU draft law on digital markets, the European Commission, while formulating the characteristics of digital ecosystems (large digital platforms), noted the importance of having a plurality of digital services. The concept of a digital ecosystem should not include digital platforms with a single service. The digital nature of the ecosystem allows it to quickly introduce new functions and integrate data across multiple unrelated business lines and markets. These factors allow the ecosystem to avoid the traditional costs associated with rapid business expansion, both vertically (by using its services in new markets) and horizontally (by expanding the “range” of services). The digital platform uses information about the sales of suppliers on its platform to research the market and develop its own line of competing products. In this regard, the company can be accused of promoting its own products in this way. These features of the functioning of digital platforms determine the need to revise the criteria for compliance with the principles of competition. As a result of processing the user habits of citizens, the ecosystem issues a personalized offer. The consequence of this may be price discrimination, when some customers are offered more expensive goods than others, depending on their purchasing power. In this regard, it is proposed to oblige platforms to disclose the principles of such pricing. Disclosure requirements and pricing transparency are effective mechanisms for regulating the existing problem, since they increase consumer awareness, facilitate price comparison and prevent consumers from being misled. However, experts note that disclosure of pricing rules can weaken competition in the market and increase the overall price level. This measure can also lead to a lag in the development of recommendation services in the global market, a violation of commercial secrets, additional costs and a slowdown in the development of digital platforms.