Business Preferences in Digital Capitalism: Communities-of-Fate and Exploitative Dependencies in US Platform Regulation

What shapes business preferences in digital policymaking? Existing research focuses on a platform-consumer coalition. However, this neglects that the policy preferences of firms from all economic sectors are being reshaped by digitalization. I argue that inter-firm relations in digital capitalism are increasingly organized in digital ecosystems. Within digital ecosystems a firm’s ownership of data, digital technologies (e.g. AI, algorithms), and digital infrastructures determines its relative position. Centralized ownership of the core inputs (being a hub) and infrastructure (owning the ties) of an ecosystem places firms in an upstream position relative to other firms, which depend on access to participate in digital value creation. I find that the upstream-downstream divide creates two logics of preference formation: First, the exploitative-dependency logic creates preference divergence toward government intervention to level the playing field because it limits the ability of upstream firms’ to appropriate value from the downstream firms. Second, the community-of-fate logic creates preference similarity when specific regulations threaten to impose costs on the operation of the entire ecosystem. These findings are based on multi-group QAP regressions on a newly created dataset that combines firm-level economic data with US lobbying disclosure reports data. The findings from the QAP regressions are triangulated with a BERTopic model and a qualitative reading of firm testimonies in congressional hearings on platform regulation. I contribute by describing US digital policy lobbying networks beyond US platform firms, by proposing a new ecosystem explanation of preference formation that takes inter-firm relations seriously, and by proposing a new measure of preference similarity based on BERTopic that addresses the weaknesses of existing text-as-data approaches to preference measurement.