1. Introduction

In the digital age, the advent of information technology has propelled the rapid growth of digital platforms. These platforms, featuring two- or multi- sided market structures, have become crucial drivers of the global economy, enabling efficient resource allocation. Existing research on this topic is extensive. For instance, Smith et al. explored the network effects within digital platforms and emphasized their role in market concentration [1]. Meanwhile, Johnson analyzed the impact of digital platforms on consumer behavior, highlighting the importance of data privacy [2].

This study adopts an interdisciplinary approach to examine the economic impacts of digital platforms. It aims to offer strategic insights for platform enterprises to optimize business models and avoid monopoly risks. Also, it provides a policy basis for government departments to regulate data governance. By doing so, this research contributes to the high-quality development of the economy and the construction of an inclusive digital ecosystem, filling research gaps in this area and offering valuable references for both academia and industry.

2. The market structure of digital platforms

2.1. Platform monopoly and competition

With the development of digital platforms, market concentration has been continuously rising, and leading platforms hold an absolute market share. It is difficult for emerging platforms to challenge incumbents, and barriers to market entry remain high. The causes of monopoly lie in Network Effects: the "Snowballing" Mechanism of Scale Expansion, and Data Advantage: The "Fuel" for Monopoly Power.

The platform adopts the price war strategy. Platforms attract users and increase their market share by reducing the prices of products or services. In the short term, it can quickly attract users and defeat competitors. However, in the long run, it may compress the profit margin.

2.2. Barriers to market entry

Digital platforms face three predominant competitive barriers rooted in their operational characteristics. First, technical barriers emerge from the substantial infrastructure requirements, where developing and maintaining a fully functional platform with stable performance demands specialized technical expertise and continuous R&D investment. Second, network effect barriers manifest through first-mover advantages - early entrants accumulate critical user masses that create self-reinforcing value propositions, making market penetration challenging for latecomers. Third, data-driven barriers crystallize through operational accumulation, as established platforms leverage vast user interaction datasets to refine algorithms, optimize services, and implement precision marketing strategies, thereby erecting data moats that new entrants struggle to replicate. For example, Amazon has long sold e-books at prices lower than the cost, squeezing out small publishers and then raising prices. Moreover, in the early days, AWS adopted a low-price strategy to seize market share in the cloud computing field. From 2007 to 2017, Google acquired more than 270 companies, including potential competitors in key fields such as Double Click (in the digital advertising sector) and Waze (in the map data field).

3. The influence of digital platforms on consumers

3.1. Consumer welfare

Digital platforms deliver three core consumer benefits through their operational mechanisms. First, 24/7 accessibility enables consumers to complete transactions anytime and anywhere, supported by seamless payment systems, efficient logistics networks, and guaranteed after-sales support. Second, price transparency empowers comparative shopping through real-time market scanning capabilities, allowing consumers to identify optimal value propositions across competing merchants while driving platform price optimization algorithms. Third, choice diversification manifests through personalized recommendation engines and global market access, transforming traditional shopping limitations into curated discovery experiences. These synergistic advantages - accessibility, price intelligence, and selection breadth - constitute fundamental value propositions that enhance purchasing power, elevate decision-making autonomy, and ultimately strengthen consumer satisfaction and platform loyalty.

3.2. Consumers' data and privacy

Consumers face various risks related to data privacy, including data breaches, data abuse, and unauthorized third-party sharing. Information leakage can result from hacker attacks or internal errors, as seen in incidents involving Equifax and Facebook. Enterprises may misuse data for purposes not disclosed to users, such as targeted advertising and algorithmic discrimination. Additionally, data is often resold to advertisers, credit agencies, and other third parties without users’ explicit consent. Emerging technologies, such as AI and big data analytics, further exacerbate privacy concerns through facial recognition and behavior prediction. These issues have significant negative impacts on consumers, prompting governments to implement stricter data protection regulations. The General Data Protection Regulation (GDPR) is the most comprehensive privacy law globally, reshaping how enterprises handle data and influencing similar legislation, such as China’s Personal Information Protection Law (PIPL). For users, GDPR serves as a crucial safeguard for personal privacy, while for enterprises, compliance is not only a legal requirement but also essential for building consumer trust.

4. The impact of digital platforms on enterprises

Digital platforms have significantly expanded market access for small and medium-sized enterprises (SMEs) by eliminating geographical limitations [3]. Previously, these businesses had a narrow market scope, but now they can reach a global audience through e-commerce platforms like Amazon and Alibaba. This increased accessibility allows SMEs to compete on a much larger scale than before.

In addition to market expansion, digital platforms have also lowered marketing costs. Traditional marketing methods often require significant capital for advertising space and promotional activities. In contrast, digital platforms provide cost-effective marketing channels. Social media platforms like Facebook and Instagram enable SMEs to create business pages, share product information, and run targeted advertising campaigns at relatively low costs. Moreover, content marketing, such as blog posts or short videos, allows businesses to attract customers without substantial expenses.

The rise of digital platforms has also driven enterprises to adopt new competitive strategies. One key approach is differentiation through digital content. In the digital age, companies can set themselves apart by creating high-quality videos, podcasts, or infographics that not only promote their products but also provide valuable information to customers. For example, a beauty brand might produce makeup tutorial videos on YouTube, establishing a unique presence and fostering customer loyalty.

Another critical strategy is data-driven decision-making. Digital platforms generate vast amounts of data, which enterprises can analyze to understand customer behavior, preferences, and market trends. Retailers, for instance, can assess e-commerce data to determine popular products, peak shopping times, and optimal price points. This data-driven approach enables businesses to make informed decisions regarding inventory management, product development, and pricing strategies, ultimately enhancing their competitive advantage.

5. The economic effects of digital platforms

5.1. Regional economic development

The government should help promote industrial upgrading. Digital platforms break down geographical barriers, enabling enterprises within the region to access broader markets and resources [4]. For example, e-commerce platforms help traditional manufacturing industries expand sales channels and give birth to emerging industries such as digital creativity and intelligent manufacturing, promoting the transformation of the industrial structure towards high-end, intelligent, and service-oriented directions.

What’s more, the government needs to enhance innovation capabilities. They provide platforms and resources for innovation for enterprises and entrepreneurs, reducing the cost of innovation. For instance, crowdsourcing platforms allow enterprises to obtain ideas and solutions globally, accelerating the innovation process and enhancing the innovation capabilities and competitiveness of the region.

5.2. Social inequality

The current situation is showing a tendency to widen the digital divide. There are differences in the access and use capabilities of digital technologies among different regions and groups. Developed regions and high-income groups are more likely to master digital technologies and reap the benefits of platforms, while less developed regions and low-income groups may lag due to a lack of equipment, networks, or digital skills, exacerbating the digital divide and social inequality.

The rapid development of certain industries is exacerbating the differentiation of the employment structure. The automation and intelligence promoted by digital platforms lead to an increased demand for high-skilled workers, while low-skilled workers face the pressure of unemployment or wage cuts. The employment structure is polarized, and the income gap widens.

The lack of effective supervision seems to be strengthening the monopoly and unfair competition in the industry. Some digital platforms form monopolies by virtue of network effects and data advantages, reaping high profits and squeezing the living space of small and medium-sized enterprises, resulting in the concentration of wealth and exacerbating social inequality.

6. Policy and regulatory issues

6.1. Anti-monoply policies

Anti-monopoly and reasonable competition policy are crucial for maintaining a fair market environment, and data privacy and security are essential for protecting individuals' digital rights in the digital age. They are both vital elements in the modern economic and technological development landscape.

Manifestations of monopoly behavior include price discrimination, such as "big data price killing"; exclusive dealing behavior, typically "choosing one from two"; and concentration of undertakings, forming a dominant position through mergers and acquisitions [5]. There are severeal suggested directions of behavior platform. For example, it is important to adhere to the "behaviorism" monopoly regulation principle, focusing on the specific behaviors of platforms rather than just market structure. Governments should improve the definition method of the relevant market and innovate analysis tools combined with the characteristics of the platform. Optimizing the reporting system for the concentration of undertakings and adjusting turnover standards and increase illegal costs are two effective measures.

Service providers may steal user’s data. The multi-tenant nature of cloud platforms may lead to data theft between tenants through covert channels. Third-party audits may lead to data leakage. Counterattacks diversify the ways of data leakage and we are facing regulatory challenges. When data flows across borders, data protection standards and laws vary in different countries and regions, making coordination difficult. The application of emerging technologies such as artificial intelligence and the Internet of Things gives rise to new data privacy and security risks, and regulation lags behind. It's difficult to define the purpose and scope of enterprise data use, and there is a tendency of excessive collection and abuse. Strengthening data protection regulations can be useful, such as the GDPR in Europe. Enterprises should adopt technologies such as encryption and access control to ensure data security. The government should take measurements to strengthen user education to enhance users' awareness of data protection.

6.2. Taxation and regulation

Existing issues with the vitality and cross-regional nature of platform transactions make it difficult to determine the tax payment location and the tax subject in tax collection and management [6]. Among the large number of individual operators and small and micro enterprises on the platform, income accounting and declaration are inaccurate, and tax losses are likely to occur. Platform businesses are innovating rapidly, such as the sharing economy and live-streaming e-commerce, and tax policies are lagging.

Tax authorities do not have comprehensive and timely access to tax-related information on platforms, resulting in information asymmetry with platforms. The large volume and complexity of platform data pose a challenge to tax authorities' data processing and analysis capabilities. The multi-departmental coordinated supervision mechanism is not yet perfect, and information sharing is not smooth.

The State Taxation Administration has issued the "Regulations on the Submission of Tax-related Information by Internet Platform Enterprises (Draft for Comment)" to standardize the submission of tax-related information by platform enterprises. Strengthen the formalization of tax authorities and improve their data processing and analysis capabilities. It is important to establish a normalized, multi-departmental, coordinated supervision mechanism and strengthen information sharing.

7. Future direction

The core contradiction lies in the conflict between surveillance and privacy, which is essentially an issue of power distribution — that is, who has the right to control data. With the acceleration of the initialization process, various surveillance means are becoming increasingly prevalent. From surveillance cameras in public areas to data tracking on online platforms, they play roles in maintaining security and improving efficiency. However, at the same time, the personal privacy space is constantly being squeezed.

Technically speaking, advanced data collection and analysis technologies have greatly enhanced surveillance capabilities, enabling the precise capture of individuals' behavioral trajectories and information. Although there are means such as encryption and anonymization in privacy protection technologies, it is still difficult to completely resist the risks brought by surveillance. Socially, the public expects to enjoy convenient digital services while protecting their privacy, while governments, enterprises, etc., out of considerations of public safety and commercial interests, have a strong demand for data collection and utilization. This leads to a fierce power-distribution game between the two sides. If power is overly concentrated in the hands of surveillance entities, personal privacy is likely to be violated; conversely, if surveillance is overly restricted, it may affect public safety and social order. Therefore, how to find a balance point in power distribution has become the key to resolving the conflict between surveillance and privacy.

The development of the platform economy will be closely linked to policy supervision, jointly moving towards a new stage of greater prosperity, order, and health.

In terms of anti-monopoly and reasonable competition policies, supervision will continue to be in-depth and precise. Relevant departments will continuously refine and improve anti-monopoly regulations to make market competition fairer. In the future, unfair competition behaviors among platform enterprises will be more quickly identified and corrected, and hidden monopoly means such as algorithmic collusion and data monopoly will also have nowhere to hide. The competitive environment of the platform economy will be purified, creating more development opportunities for innovative small and medium-sized enterprises, promoting the formation of a good ecosystem in which large, medium-sized and small enterprises develop in coordination in the platform economy field, and stimulating the innovation vitality of the entire industry.

The protection of data privacy and security will become the cornerstone of platform development. With technological progress and strengthened supervision, technologies such as data encryption and canonization processing will be widely applied to reduce the risk of data leakage. Regulatory authorities will also strengthen the supervision of the entire process of platform data collection, storage, and use, clarifying the data security responsibilities of platforms. Users will have more control over their personal data and can enjoy services on platforms with confidence, thereby enhancing trust in the platform economy and promoting the sustainable and healthy development of the industry.

The tax supervision system will continue to be optimized in the platform economy field.

Information sharing between tax authorities and platform enterprises will be smoother. By using technologies such as big data and artificial intelligence, precise tax collection and management of platform transactions can be achieved to ensure tax fairness. Tax policies will also be more targeted, encouraging the innovative development of the platform economy while preventing tax losses, creating a stable and fair tax environment for the platform economy, and helping the platform economy to contribute more to national economic development.

In summary, under the escort of policies and regulations, the platform economy will continue to break through in innovation and move forward steadily under regulation, injecting a continuous stream of new momentum into economic growth and social development and becoming an important engine for promoting high-quality economic development.

8. Conclusion

This paper comprehensively explores the economic impacts of digital platforms. It first analyzes the market structure of digital platforms, including monopoly and competition issues as well as barriers to entry. Then, it elaborates on the influence of digital platforms on consumers, covering consumer welfare and data privacy concerns. The impact on enterprises, such as market expansion, cost reduction, and the adoption of new competitive strategies, is also examined. Moreover, the paper discusses the economic effects on regional development and social inequality, along with policy and regulatory issues. This research holds significant value, providing strategic references for platform enterprises and a policy basis for government departments, thus contributing to high-quality economic development.

However, this study has certain limitations. It lacks empirical research. Most of the analysis is based on theoretical discussions and case illustrations, without in-depth field surveys or data collection from a large number of samples. To address this, future research could conduct large-scale surveys among platform users, enterprises, and relevant government departments. Additionally, given the rapid development of digital platforms, new business models and technologies may emerge. Therefore, continuous tracking and research are needed to make the study more comprehensive and up - to - date.