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‘Categorisation’ is key to regulation of new technology platforms, Professor Shahzad Ansari of Cambridge Judge tells the AOM Big Data Conference.

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Professor Shahzad Ansari

Professor Shahzad Ansari

The “categorisation” of new technology platforms will be critical as regulators and other policymakers address issues raised by the market power of platforms operated by companies such as Amazon and Google, Professor Shahzad Ansari, Professor of Strategy and Innovation at Cambridge Judge Business School, told the Academy of Management (AOM) Big Data Conference today (20 April).

Shahzad discussed how the category of such companies has become contested owing to dissolving industry boundaries that allow companies in one sector to compete in another – as shown by initiatives launched by companies such as Google and Chinese internet giant Baidu in the autonomous car sector, where they may compete with traditional automakers like Volkswagen.

“Categorisation is key to regulating a new technology, but policymakers have not yet set accepted rules on whether these dominant platform companies are defined as technology firms or something else,” says Shahzad.

Shahzad says:

“Categorisation is also key to investor perception, as shown by the way Amazon was categorised in the late 1990s as a dotcom rather than a bookseller – persuading investors to view its losses as future investment rather than evidence of a weak business model.”

Categories are not simply “given” as a system of classification; rather categorisation is a political and strategic process, and firms strive to shape category systems and strategise to define themselves in a more diverse category (such as technology company) versus a more specific category (hotel) to influence regulatory categories. Thus, categorical membership is crucial to firms’ performance and governance, as well as the emergence of nascent markets.

Shahzad argued that regulatory categorisation of products can even determine the survival of firms, as categorisation of companies may precede categorisation of their product or market sector.

The symposium – entitled “Digital Platforms and Ecosystem Governance: Is Dominance Abuse Unavoidable?” – was held at the University of Surrey in Guildford, UK. Panellists also included academics from Saïd Business School, the University of Surrey, Warwick Business School, London Business School, and the London School of Economics.