Italy

Italian Communications Authority releases report on online platforms

IRIS 2020-2:1/8

Ernesto Apa& Marco Bassini

Portolano Cavallo

On 12 December 2019, the Economic and Statistical Division (Servizio Economico Statistico) of the Italian Communications Authority released the Observatory on Digital Platforms for 2019.

The document provides a comprehensive overview of the value of the digital market and of the main actors operating within it. It shows the rising role of digital platforms which hold seven out of the ten top seats of the world ranking (Microsoft, Apple, Amazon, Google, Facebook, Alibaba, Tencent).

The research consists of four sections, devoted respectively to: general information; markets and services; data economy; ROE (return on equity) and ROI (return on investment) indexes.

The report focuses on the main platforms in Italy, drawing an analysis in comparison to the other TLC & Media companies which operate in the Italian territory. It highlights the growing trend of “platformization” of the world economy. The report points out that the worldwide amount of revenues generated by digital platforms amounts to EUR 692 billion. Apple is the company which ranks first, while Google generates the highest amount of revenues within the so-called SIC (Integrated System of Communications). The globalisation index (that is, the percentage of revenues generated outside Europe) of digital platforms amounts to 46% and is significantly higher compared to the 15% rate of TLC & Media companies. The document also provides statistics on key indexes such as workforce, workforce productivity and operational profitability.

In the second part, the report crafts a map of where digital platforms operate their activities and services, categorising them into three clusters of the production chain, namely infrastructures, enabling technologies and online services. The study also offers some remarks concerning the type of business model adopted by digital platforms. It highlights three possible models: a model where end users constitute the exclusive or prevailing source of revenues, a model where the only source of revenues lies with advertising and a more heterogeneous model.

The third part of the research delves into the data economy. It first analyses the types of data gathered by digital platforms (that is, search, social network, instant messaging, email, maps, app store, voice assistant, entertainment, health, payments and analytics) while providing the respective service.

The fourth and last part of the research provides information relating to the ROE and ROI indexes. The average value of ROE for digital platforms amounts to 32%, while that of TLC & Media companies is 10% (and major Italian companies reach 7%).

When it comes to the ROI index, the annual average rate is 15%. The value increased by 11% over the period 2016-2018. In the TLC & Media industry, the rate is 3%, while in the case of major Italian companies it amounts to 7%.