How Platforms Are Governed: The Social Regulation of Digital Capitalism
I. Introduction
Mark Zuckerberg once remarked in an interview: "In a lot of ways Facebook is more like a government than a traditional company." The power and wealth of platform companies like Facebook have reached unprecedented levels, forming what Philip J. Stern calls a new form of the "company-state": corporations endowed with the power to regulate not only trade, but also law, land, and liberty. In short, corporations have the power to regulate human life. Rather than being blind to these powers, platform companies view such governance as the core of their business model and refer to their users as "citizens." As major platforms exercise their digital power as a political force, governments find themselves negotiating face-to-face with platform companies over issues that previously belonged entirely to the domain of democratic decision-making.
For decades, platforms have continuously sought organizational structures suited to the characteristics of digital technology, becoming a dominant mode of operation. The platform model leverages the superpower of digital technology to shape life through social infrastructure in order to engage in privatized governance. Just as Fordism-Keynesianism emerged after the Great Depression, and post-Fordism emerged after the economic crisis of the 1970s, a native digital form of accumulation began to rise following the 2008 financial crisis. In the ensuing years, platforms such as Amazon, Alphabet, Airbnb, Facebook, and Uber experienced explosive growth, forming the digital ecosystem that can now be called the core of contemporary capitalism.
The rise of platforms has attracted significant scholarly attention, with researchers attempting to explain the profound impact of this "Great Transformation." Some scholars emphasize discontinuity, arguing that platformization breeds an entirely new form of capitalism; others emphasize continuity, contending that platforms reinforce and accelerate current neoliberal trends.
This article attempts to bridge this divide by applying regulation theory to explain digital capitalism. That is, digital capitalism—as a continuation of capitalist development—produces discontinuities determined by local institutions, yet at its core, it shares a common model: the digitization, privatization, and financialization of market regulation. This article proposes the following three main arguments.
First, we situate digital capitalism within the history of capitalist transformation, arguing that it is both a continuation of and a rupture from existing trends of financialized capitalism under neoliberal forms. A defining characteristic of digital capitalism is the proprietary nature of its markets—that is, they are owned and managed by private corporations. This can be seen as a continuation of post-Fordist trends; however, this continuity produces discontinuity because the operational conditions and pressures of digital proprietary markets are essentially different from those of the post-Fordist period.
Second, the platform business model extracts rent by controlling access to vital resources. This business model depends on the platform's capacity for monopolistic control over the market, the possession of which allows platforms to compete directly with the state. Platforms attempt to liberate their markets from the oversight of public institutions so as to operate effectively on the same level as the state. If Fordism was defined by national markets regulated by the state, and post-Fordism by transnational markets regulated by the state, then digital capitalism is defined by digital proprietary markets owned and regulated by transnational platform companies.
Third, due to the new pressures brought by privatization and new forms of control brought by digitization, platformization has transformed the mode of social regulation—the institutional and cultural logics, norms, and policy paradigms that provide the basis for accumulation. Just as Fordism brought about modernism and a culture of mass individualism characterized by hierarchy and top-down control, and post-Fordism brought about neoliberal political ideology, market laws, and a postmodernist consumer culture, digital capitalism is gradually forming a unique superstructure based on the capacities of digital technology. Here, we attempt to outline some contours of the shift in the mode of social regulation following digital capitalism, examining its capture mechanisms, labor processes, and cultural logics: from neoliberalism toward techno-feudalism; from Taylorist hierarchy toward algorithmic groups; and from postmodernism toward an automated consumer culture.
This article will argue these three points based on threads from existing literature, using a rigorous, typological analytical framework to elucidate the structural pressures forming new modes of regulation.
II. Positioning Digital Capitalism
Regulation theory focuses on the way the economy is embedded in social, cultural, and political contexts, tracing historical changes in political economy through two core concepts: the "regime of accumulation" and the "mode of regulation." The former describes the way production, circulation, consumption, and distribution are organized to expand capital, while the latter is a set of norms, cultural logics, and policy paradigms provided for the regime of accumulation. The starting point of regulation theory is that capitalism requires the state, because capitalism generates conflicts and tensions that hinder its own further development. Therefore, capitalism must be constrained by restrictive structures that are not the product of individual rational calculation or competition, but the product of collective state decision-making—understood here as the local arrangement of institutionalized political power.
One cannot conceive of a capitalist economy without the state playing an explicit role, but the relationship between capitalism and the state is an unstable one, characterized by a conflictual relationship between their competing forces. This conflict often enters periods of temporary stable power equilibrium—the structural coupling between accumulation and social regulation—but it is also broken by crises and restructuring. The outcomes are shaped and constrained by the fundamental trends and counter-trends of specific accumulation trajectories, and are ultimately determined by political institutions. Regulation theory utilizes these conflictual relationships to explain the developmental trajectory of capitalist society, focusing on how a series of measures and regulatory structures temporarily contain the internal contradictions of capitalism.
Fordism was the primary regime of accumulation from World War II to the mid-1970s. It contained the trend of increasing inequality by achieving rapid economic growth through debt-driven operations, thereby resolving the contradictions of capitalism. However, by the late 1960s, the Fordist system of mass production and mass consumption faced pressure, and the crisis of accumulation grew increasingly severe. Western Europe and Japan had fully recovered from the war, and their internal markets were becoming saturated as "basic needs had almost been met." consequently, the inherent contradictions of capital became increasingly evident. The geographical mobility of capital was both a driver and a result of this crisis, as uncontrolled industries sought to reduce wage costs by investing in low-wage regions to escape national wage negotiation systems, thereby weakening the power of labor unions. However, due to the lack of transnational institutions and international coordination for the Fordist wage compromise, globalization severed the link between income, demand, and productivity growth, adding a second "demand-side" dimension to the crisis.
The transnational mobility of capital brought a new fundamental logic shaping the role of the state: the nation-state no longer operates solely within its jurisdictional borders but competes with other states for freely flowing global capital. Competition for global capital between states and regions triggered persistent concerns about "under-regulation": countries faced pressure to compete for business while viewing market regulation as a key condition for their competitive success. In short, globalization meant that the crisis of accumulation became a crisis of social regulation, because accumulation became global while regulation remained national.
While Fordism achieved rapid economic growth and temporarily resolved the conflictual relationship between democracy and capitalism, post-Fordism did not provide a similar solution. It did not solve the Fordist growth crisis; instead, it shifted the focus from wealth creation to wealth redistribution. Post-Fordism achieved the "financialization of everything" by removing the regulatory constraints and barriers that had hitherto restricted financial activity, thereby leading to the consolidation of oligopolies, monopolies, and transnational forces, as well as the intensification of social inequality—trends that made the neoliberal state appear to be "either a transitional political form or an unstable political form."
Digitization first emerged as a component of the macro-trend of capitalist restructuring. Digital technology provided the infrastructure for the global financial system: financial products are fundamentally predictive mathematical and computational entities. By expanding the scope of social phenomena that can be captured, predicted, and controlled, data and algorithms have financialized new domains of the social world and incorporated them into capitalism—integrating into spheres previously inaccessible to capital and expanding the productive resources available to it.
While digitization was initially just a component of post-Fordist macro-trends, capital soon discovered that digital technology offered new forms of social control that would provide the framework for a more fundamental capitalist transformation. The beginning of these shifts appeared after the 2008 global financial crisis in the form of native digital organizations: platforms. Platforms utilize digital technology to curate programmable social infrastructure that enables buyers and sellers to meet—forming a type of proprietary market. Therefore, the platform business model can be broadly understood as using digital technology to privatize the market itself and financialize its ownership and regulation. If Fordism was defined by national markets under state regulation, and post-Fordism by transnational markets under state regulation, then digital capitalism is defined by digital proprietary markets owned and regulated by transnational private companies through digital technology.
Thus, the platform model constitutes the convergence of several long-standing post-Fordist trends: neoliberal privatization and the tendency toward the "financialization of everything"; the flexible formation of new financial conventions; the use of digital code as a means of shaping social institutions; and the use of data as a means for their financialization. In this sense, digital capitalism should be viewed as digital financial capitalism, because digitization and financialization are so tightly linked as to be almost inseparable. Therefore, while the platform model naturally builds upon existing post-Fordist institutions and digital technologies, it simultaneously represents a novel and "complex mystery of forces merging political, social, institutional, and technical components."
III. The State and Platformization
Although platformization began with "sharing economy" platforms like Airbnb and Uber, over time it has been generalized into a broader capitalist logic that exploits the capabilities of digital technology. At the core of the platform model is the use of new mechanisms of monopoly power to control strategic bottlenecks for accumulation, enabling firms to manipulate markets and extract rent from producers by controlling access rights. Fordism pursued profit through wealth creation and production rationalization; post-Fordism pursued profit through financial markets and wealth redistribution; digital capitalism generates profit through the rental rights associated with controlling access to key resources. Thus, the crux of platform strategy lies in using digital and political strategies to raise barriers to entry, making markets uncompetitive and thereby capturing monopoly rents.
The monopoly power of digital capitalism is fundamentally different from the steel and railroad monopolies of the Fordist era: a company like Amazon has not even reached the point of monopolizing the retail industry, yet it is able to use digital power to dominate key points of accumulation to extract monopoly rents. This digital dominance stems primarily from three sources. First, the strategic use of infrastructure by platforms, which generates "lock-in"—that is, the platform provides stable, essential functions, thereby creating user dependence on privatized infrastructure. As Sabeel Rahman and Kathleen Thelen have observed, the very concept of a "platform" reflects the aspiration to become the fundamental infrastructure of an industry. Second, the intermediary status granted by ownership of social infrastructure provides access to data flows and allows platform companies to shape social patterns through a global architecture of behavioral monitoring, analysis, prediction, and modification. The ability to gain advantages from massive data can be scaled at near-zero cost, resulting in what is known as "digital monopoly" or "data monopoly." Third, the strategic exploitation of demand-side economies of scale, known as "network effects": since the value of using a platform is a function of the number of market participants, market incumbents are strongly favored. The result is a "monopoly-generating feedback loop," which leads to most mature platform markets being dominated by one or two giants.
Platforms only become truly valuable when they are able to control access to resources. Consequently, competition becomes a "winner-take-all" turf war that systematically favors capital and economies of scale, wherein dominant platforms leverage their power in one industry to suppress competition in others. Unlike the monopolies of the Fordist era, these new forms of monopoly power are not based on vertically integrated firms and direct ownership, but on digital capabilities for market control and manipulation. The result is that firms develop and expand according to a data-centric logic—constantly extending their roots to control the infrastructure upon which competitors depend and expanding their data extraction into new domains—thereby occupying and consolidating markets horizontally through what Nick Srnicek describes as "rhizomatic forms of integration." A consequence of this horizontal expansion is that platform companies expand and compete across a range of markets: Amazon (originally a bookstore), Google (originally a search engine), and Meta (originally a social networking site) are currently engaged in turf wars for control over various market segments.
As platforms seek to acquire monopoly market control, the state effectively becomes a party to platform competition: Uber competes with Lyft, but it also competes with ordinary taxis and urban public transportation systems. Platforms attempt to utilize institutional loopholes to escape state control; thus, the well-documented regulatory and political consequences of platforms can be viewed as part of their competition with the state. For instance, Uber attempted to exploit regulatory gaps, mobilizing political and legal forces to avoid state regulation of its operations. Leaked "Uber Files" revealed how the company violated laws, bypassed regulators, exploited violence against drivers, and lobbied governments worldwide. The core role of politics for platform companies lies in the fact that their influence and nature depend largely on the local institutional environment, as platforms seek to target and exploit specific local regulatory and institutional conditions. For example, Thelen [10] found that Uber's influence in Germany, Sweden, and the United States differed significantly because the platform adapted to local forms of regulation and governance in an attempt to identify and target loopholes and regulatory gray zones. However, despite the significant regional variations in the impact of platformization, these platforms tend to follow common political strategies defined by the exercise of digital technological power. Here, we will briefly outline some key characteristics of platform strategies relative to the state, and how these strategies form distinct paths for the transformation of regulation.
The platform model implies providing technological solutions for social problems—what Evgeny V. Morozov calls "technosolutionism"—which is a strategic means of colonizing the realm of political decision-making: namely, using the private and the technical to replace the public and the political. These platforms utilize technology to develop regulatory gray zones—engaging in what Gabrielle Hecht calls "technopolitics," defined as "the strategic practice of using technology to constitute, embody, or enact political goals." While it might be better to view platforms as "regulatory" rather than "technological" entrepreneurs, technological innovation is central to their regulatory pursuits. Although technological innovation always brings political consequences, these consequences have now become the primary purpose of the platforms.
Backed by massive venture capital, platforms tend to expand rapidly, allowing them to undermine competitors and build a user base quickly. While this paper understands this as a means of outperforming other platforms, it is simultaneously a developmental strategy targeted at the state, as rapid expansion enables platforms to acquire political and legal power, hire lawyers and lobbyists, and mobilize their user base as a political force. After establishing operations in regulatory gray zones, the strategy of rapid expansion allows platform companies to present a fait accompli to slow-moving legislators while mobilizing overwhelming political and legal force against subsequent attempts at regulation.
Platforms seek to expand their roots to control the infrastructure upon which the state, regulators, and political elites depend. As platform companies become the "infrastructural core" of the global digital economy, they are also embroiled in geopolitical conflicts, becoming "key pawns in an intensifying struggle for hegemony." Consequently, states attempt to support the process of platformization as a means of gaining geopolitical influence.
Platforms not only attempt to exert regulatory influence over the state but also seek to achieve their own forms of sovereignty. Although platforms possess powerful control through infrastructural design and data extraction capabilities, they often attempt to maintain a façade of neutrality to avoid regulatory responsibility. For example, Uber uses algorithmic forms to control workers but claims they are not employees but "independent contractors," and thus not fully protected by labor laws and the welfare state. This means platforms can shift costs and risks onto workers. This is part of a broader strategy in which platforms—from social media to gig work—utilize technological design to anchor themselves in regulatory gray zones, employing algorithmic governance to shape markets that align with their interests, while using a discourse of neutrality to shift legal liability onto users. Platforms act as legal and political redoubts for these users—hiding their identities and mobilizing legal and political power to protect them from regulation. Platforms also seek to decouple proprietary markets from the broader public market, making participants subject only to the taxes and governance imposed by the platform itself.
In short, platforms compete with the state for regulatory power, leading platformization to become a path-dependent and contingent process driven by firms utilizing the social power of digital technology to target institutional and regulatory loopholes. Just as the pressures of post-Fordist inter-state competition brought about the rise of neoliberalism through various paths, the shared model of platformization is gradually emerging from a mixture of diverse and even contradictory institutional forms and strategies. The systemic pattern of platformization is the digitalization, privatization, and financialization of market regulation.
IV. The Social Regulation of Digital Capitalism
In a broad sense, platformization can be understood as the adoption of new digital mechanisms to dominate markets, driving the process of privatizing and digitalizing capitalist regulatory functions—functions for which capitalism previously had to rely on the state. Just as post-Fordism was formed by capital breaking the shackles of the Fordist-Keynesian nation-state, digital capitalism is formed by capital breaking the shackles of the minimal neoliberal state. Aided by market privatization, platformization responds to the contradictions of the neoliberal state by weakening the regulatory role of state institutions over the market. This is evident in the current use of digital infrastructure by platforms to perform regulatory functions previously undertaken by public institutions: platforms register market participants, set market access conditions, and establish rules of competition. Platforms guarantee customer reputation and delivery efficiency, enforce market contracts, and ensure that transactions agreed upon by both parties are fulfilled; they provide and monitor regulatory norms, implementing penalties such as fines, the imposition of reputation costs, and even market expulsion; they organize labor relations, determining wages through proprietary algorithms rather than state-provided minimum wages or wage negotiation mechanisms; and they centralize and mobilize market information, coordinate markets, adjudicate disputes, and provide the information necessary to assess the quality of goods.
While platformization emerges as a continuation of long-term trends and is integrated into existing institutional arrangements, it is underpinned by what regulation theorists call "endogenous metabolism": endogenous tensions within platform architecture may lead to further institutional transformation. These endogenous tensions stem primarily from two factors: first, proprietary markets are shaped by a different relationship between regulators and the market, creating new forces that shape their social regulation; second, the governance of digital technology produces a specific way of seeing the governed. James C. Scott described how the modernist state exercised power through a top-down, population-based epistemology, utilizing hierarchical command and control to make the social world legible and submissive to state power. Zygmunt Bauman traced this top-down epistemology of the Fordist-Keynesian state back to the Fordist factory, characterized by hierarchy and strict boundaries. As the platform is poised to replace the Fordist factory as the primary "epistemological construction site" of contemporary capitalism, a new way of seeing has been born—one that is made legible through Big Data and implements control through programmable social infrastructure. Petter Törnberg and Justus Uitermark, along with Engin F. Isin and Evelyn Ruppert, place this digital form of control within the history of power proposed by Michel Foucault, arguing that it marks a shift in regulatory power from a top-down data epistemology of the "average man" to a power shaped by the epistemological characteristics of Big Data: a power that is cluster-based, relational, interactive, fluid, and ostensibly bottom-up—in short, "symbiotic" [11].
Thus, platformization holds the promise of a new logic of governance, providing the foundational market ideology, discipline, and rationality for post-Fordist social regulation. Just as the modern disciplinary power proposed by Foucault was reshaped by the biopolitical power exerted by neoliberal rationality, neoliberal biopolitical power is now being transformed by the complex power brought about by digital technology. Just as neoliberal rationality was accompanied by a related ideology and a belief in the legitimacy of market rationality in regulating all aspects of human life, this complex control is accompanied by a related ideology—what Thomas M. Malaby calls "techno-liberalism"—the definition of which embodies a trust in the legitimacy of emergent effects; that is, "the emergent properties of complex interactions are somehow correct precisely because they are emergent."
The following will examine the impact of this shift on social regulation across three dimensions, treating each discontinuity as part of the continuity of longer-term trends—from Fordism to post-Fordism, and then to digital capitalism.
(1) From Neoliberalism to Techno-Feudalism
In an analysis of post-Fordist regulation, David Harvey described how historical patterns of market governance were shaped by democratic forces and the pressures of competition. Harvey argued that during the Fordist period, democratic pressure meant that the state was "managerial" toward its markets: the state attempted to embed, manage, and shape markets through welfare provision, active intervention, and development for the benefit of its citizens. As we have already discussed, post-Fordism meant that this managerial system was undermined by globalization, forcing states to compete for transnational capital. This led to what Harvey called an "entrepreneurial" model of market regulation, as states sought to improve their competitive position by providing favorable conditions for capital.
When a platform successfully replaces the state as a regulator and occupies a monopolistic dominant position, it is subject to pressure from market competition and democratic forces. Regarding markets, these platforms are neither managerial nor entrepreneurial, but rather a "parasitic" governance model described by Andy Merrifield, or what Cédric Durand describes as a "predatory" governance model—a form of governance implemented primarily in pursuit of its own interests. If the managerial state managed and shaped markets for the benefit of its citizens, and the entrepreneurial state sought to provide attractive conditions for transnational capital, then the design of proprietary platform markets is intended to maximize platform profits.
Therefore, these proprietary markets will not be neoliberal markets in the traditional sense. While platform owners tend to believe they are merely manifesting the "invisible hand" of the market through algorithms and data—providing a neutral infrastructure for market forces—they are also incentivized to design and regulate markets according to their own profit motives rather than neoliberal ideological principles. Platforms design the rules of market exchange based on their own interests, which often disrupts and suspends the principle of fair exchange. While the privatization of regulation can be seen as a continuation of the neoliberal agenda to expand market mechanisms, the result looks less like a neoliberal mechanism of power and "more like serfs on a feudal manor—always at the mercy of the lord, who can appropriate their livelihoods without compensation." Durand [12] similarly likens platform capitalism to a form of "techno-feudalism," as its predatory regime of accumulation is achieved through appropriation and unproductive rent-seeking, protected by extra-economic forms of forceful power.
(2) From Taylorist Hierarchy to Algorithmic Swarms
Fordism was characterized by the adoption of the Taylorist production model, centered on achieving economies of scale and efficiently producing relatively homogeneous goods through highly hierarchical organizations. In contrast, Post-Fordism emphasizes flexibility, innovation, and economies of scope.
Platformization implies a continuation and extension of the Post-Fordist production model, yet it contains qualitative changes as programmable social infrastructure is used as a means of precise control over workers. The neoliberal market model is replaced by programmable proprietary markets that utilize algorithms, data, and AI to shape worker behavior in a precise yet seemingly general manner. Platforms control their workforce through dynamic ratings and scoring, while simultaneously conducting automated monitoring and management of workers through data flows and algorithmic management. The neoliberal "market governance regime" is thus transformed into a regime that is not only market-oriented but also technological, molding a "techno-liberal" subjectivity in workers that can be shaped according to corporate needs.
Antoinette Rouvroy and Thomas Berns describe "algorithmic rationality": a rationality "built on the automated collection, aggregation, and analysis of big data to model, predict, and pre-emptively influence future behavior." For example, by having workers interact in the market as competitors rather than collaborators in a team, and by designing interfaces that prevent workers from communicating or learning from one another, platforms can prevent the emergence of key political subjectivities, thereby reducing the possibility of collective action. Platforms further shape employee subjectivity by: first, gamifying performance; and second, creating horizontal peer-to-peer control systems using review metrics and performance evaluations from customers and peers. Accordingly, labor regulation combines Taylorist precision control with the flexibility and informal precarious labor contracts of the neoliberal market model, undermining labor mobilization and thus reducing the possibility of platform workers' "re-embedding."
(3) Toward an Automated Consumer Culture
The cultural logic of Fordism was characterized by mass consumption and mass individuality, increasing the public demand for standardized goods. As mentioned above, the crisis of Fordist accumulation began as a crisis of demand, because these "basic needs had been almost entirely met." Post-Fordism is characterized by a shift toward individualization, targeting specific consumer niches and shaping a culture capable of distinguishing consumers through differentiation.
While we tend to think of technological innovation as a means of increasing productive forces, since the Fordist crisis, the primary direction of investment in technological innovation has been toward financialization and the creation of demand rather than maximizing productive forces—a result of the weak demand side of Post-Fordism. Since the 1970s, whether the application of digital technology has made a significant contribution to the development of productive forces remains a matter of debate. Although much of the concern regarding AI and digital automation focuses on its potential impact on labor, digitalization is still characterized by the rationalization of consumption rather than the rationalization of production: companies like Alphabet and Meta are essentially advertising platforms that extract personal data and use complex AI to predict, guide, and manipulate consumer behavior. The development of such platforms benefits from their predictable promise of creating consumption, thereby enabling the possibility of financialization.
Consequently, digital capitalism is beginning to shape a consumer culture of its own. If the cultural logic of Fordism was characterized by mass-individuality, and Post-Fordism by postmodernity and subcultures, then digital capitalism is characterized by a cultural logic emerging around manipulation based on digital control. From the economies of scale of Fordism to the economies of scope of Post-Fordism, we are seeing an initial shift toward an "economy of action." In this shift, marketing is increasingly capable of shaping consumer demand through the plasticity of identity and difference. This allows platformization to bring about a unique regime of consumption, characterized by the adoption of increasingly illiberal forms of control, domination, and manipulation, utilizing consumers' social insecurities and anxieties to shape their consumption needs. Thus, platformization appears to be part of a movement toward a "climax of alienation," a process in which digital forces allow the market system to take on a life of its own.
V. Discussion
The Fordist-Keynesian state was a container for domestic markets, playing a "managerial" role. But after the accumulation crisis of the 1970s, capital broke through the boundaries of the nation-state, and the state became a "neoliberal" or "entrepreneurial" state. While Fordism temporarily resolved the inherent tension between democracy and capitalism by preventing the intensification of inequality through rapid economic growth, Post-Fordism and neoliberalism experienced a rapid intensification of social inequality, suggesting that Fordism was an unstable or transitional political form. This laid the foundation for the emergence of digital capitalism.
Platforms are techno-political actors that constitute, embody, or enact political goals through technology, seeking to use digital power to monopolize governance. Therefore, platformization can be seen as the continuous use of digital power for social control in contemporary capitalist society. Just like the transition from Fordism to Post-Fordism, the process of platformization is a slow, incremental, and diverse path-dependent process. In this process, different platforms strategically adapt to local institutions, seeking to identify and exploit their loopholes and weaknesses. However, platformization has a common feature: the active political intervention of capital into the state, attempting to shift decision-making power from elected bodies to private companies.
Therefore, under the conditions of digital capitalism, markets are proprietary; in terms of regulatory roles, platform companies are competing with public institutions and even seeking to replace them. Digital capitalism is built on sophisticated forms of control via digital technologies, which are forming a mode of accumulation based on new forms of domination. By privatizing market regulation, digital capitalism resolves the neoliberal tension between democracy and market forces. In doing so, state institutions and collective decision-making related to market regulation become obsolete. Consequently, digital capitalism is built upon the privatization, digitalization, and financialization of market regulation.
Fordism pursued profit through the rationalization of production, Post-Fordism pursued profit through financialization and appropriation, while digital capitalism pursues profit through "forced accumulation"—that is, using digital power to maintain a stranglehold on key points of accumulation to amass profit, and using the threat of exclusion to extract monopoly rents. During the Post-Fordist period, globalization prompted the offshoring of manufacturing, thereby weakening labor and putting pressure on states to deregulate markets, causing affluent economies to shift toward the service sector. Platformization is a continuation of this trajectory, as platforms in practice constitute a privatized and deterritorialized tax haven, allowing service sector work to be offshored digitally. This increases the competitive pressure faced by the state, forcing it to provide markets that are attractive to capital through "regulatory thinning" in the form of privatization, while providing firms with the means to evade unions and state regulation.
Digital capitalism brings a new mode of social regulation because capital is using code to rewrite the law and utilizing digital technology as a medium to replace the role of state institutions.
First, the privatization of markets can be seen as a continuation of the neoliberal agenda, as it represents the expansion of market forces into new fields. Platforms set the rules for interaction and competition, designing market mechanisms according to their own interests, which often runs counter to the ideals of free market competition. If the contradiction of the neoliberal state is the contradiction between democracy and market forces, the contradiction of digital capitalism is the contradiction between market participants and the platform.
Second, platforms are based on the use of programmable social infrastructure to control social outcomes, which appear to emerge organically from individual interactions. Through code and data, governance is depoliticized and privatized, forming proprietary algorithms. These algorithms utilize vast amounts of behavioral data to alter social systems through infrastructural design—turning social problems into technical problems that can be solved through private means. Platformization means the application of privatized technology as the basis of governance to replace the political life of the community. In this sense, platformization embodies a "post-end of politics" politics, stripping the results of its actions of dimensions such as politics, conflict, and power, and treating them as inevitable and natural. Since neoliberal ideology is based on trust in the inherent legitimacy of market logic, these cybernetic systems are subject to their own techno-liberal ideology: a trust in the "invisible hand" of the platform algorithm.
VI. Conclusion
This article has applied Regulation Theory to study the continuities and discontinuities associated with the rise of digital capitalism. Digitalization emerged first as part of a macro-trend of capitalist restructuring in response to the Post-Fordist crisis, and as a supplement to the financialized neoliberal regime. However, digitalization also brings challenges to existing institutions: because digital goods are not scarce and can be reproduced at near-zero marginal cost, they present a highly contested challenge to capitalist accumulation—even leading some scholars to speculate that digitalization will bring about a post-capitalist utopia. The solution provided by capitalism to this dilemma is the platform, which is capable of using digital technology to centralize and control access to resources, artificially creating scarcity. The platform model is ultimately built on a predatory regime of accumulation through unproductive rent-seeking, guaranteed by extra-economic forms of forceful power. Therefore, some scholars argue that digitalization will not bring about post-capitalism; on the contrary, it may bring about pre-capitalism—something that has more in common with feudalism than with socialism.
This shift involves not only a transition from one regime of accumulation to another but also a completely new system of production. At the same time, this pseudo-feudal form of accumulation is currently situated within a larger institutional hierarchy that closely resembles the financialized neoliberal regime of accumulation. The combination of old and new systems indicates that we are in what Gramsci called an "interregnum": an uncertain moment when the new is just beginning to sprout from the ashes of the old. While we have outlined how platformization exerts pressure on existing institutions and social regulation, the resulting regulatory regime and the institutional configuration of digital capitalism are still in the making. As researchers of Regulation Theory emphasize, although the outcome at this moment is constrained and bound by broader capitalist trajectories, it is ultimately determined by political processes. At this crossroads, we can broadly outline three possible paths forward.
The first path is the continuation of the currently relative laissez-faire platform capitalism that has dominated the West so far. This path implies that new forms of accumulation will be realized through old mechanisms of governance, driven by geopolitical interests, while platform companies will likely continue to grow and consolidate, leading to the rise of an elite class capable of manipulating social, political, and economic conditions. Platforms may acquire increasing governance capabilities through digital surveillance and control—"in functional areas ranging from housing rentals to transportation to commerce, people will be increasingly controlled by corporations rather than the state."
The second path is a potential trajectory. The control capabilities and data extraction functions of the platform model enhance the state's capacity for control, which has the potential to penetrate deep into the social, political, and economic dimensions of citizens' daily lives.
The third path requires treating the social infrastructure of platforms in the same manner as other public infrastructures, though examples of this remain scarce. This path would subject platform infrastructure to rigorous regulation, and platform design would be subordinated to political and democratic decision-making to serve the public interest. This model might include "platform cooperativism" [15] models, in which non-market actors are responsible for developing platforms, establishing them on non-market values such as solidarity and democratic ownership, and seeking to achieve fair labor conditions through digital forms of collective bargaining. While this is technically feasible, without strong state support and a matching regulatory framework, such platform cooperative enterprises are unlikely to compete with private quasi-monopolies built on the foundation of nearly inexhaustible financial investment. This suggests that it may be beneficial to approach the issue from the perspective of a more fundamental social transformation.
Although platformization originates from the continuous improvement of technocratic governance capabilities, the road ahead remains open. While early techno-utopianism has been replaced by techno-dystopianism—not without reason—it is important to recognize that the high hopes placed in digitalization were not misplaced. Today, digital technology may undermine democratic rights, weaken public services, lead to labor precariousness, infringe upon privacy, and destabilize world democracy; however, its political possibilities can also contribute to the realization of new forms of democratic governance. We can envision digital technology supporting transnational regulatory governance institutions, thereby providing new institutionalized solutions to the long-standing crisis of Fordism [16]. However, achieving such an optimistic vision requires us to exercise our political imagination. Although our political strength has withered during decades of neoliberal hegemony, we must recognize our capacity to take control of the situation. Code is institution, code is regulation, code is politics; therefore, code must be subordinated to political life. Platformization is both a political process and a contingent one. This article hopes to make a contribution toward achieving this goal, however modest that contribution may be.