How US Platform Dominance Shapes the Competitiveness of Europe’s Creative Industries?

Introduction

In recent years, the creative economy has emerged as a significant driver of growth, innovation and employment within the European Union. Creative industries contribute substantially to EU GDP and play a vital role in shaping cultural identity and economic resilience. However, the rapid digital transformation of these industries has fundamentally changed how value is created, distributed and monetised. Increasingly, creative production and consumption are mediated by large digital platforms such as YouTube, Instagram, Facebook, TikTok and others. These platforms, predominantly owned by US-based tech companies, have become central gatekeepers of access to global audiences, advertising revenue and data-driven market insights. The platform-based ecosystems are reshaping market structures by concentrating power in a small number of global actors, raising concerns about competition and market fairness. In response to these challenges, the European Union has developed a range of regulatory and policy instruments aimed at ensuring fair competition, supporting cultural diversity and strengthening digital and industrial capacity. These include key regulatory measures targeting large platforms, alongside sector-specific initiatives for the audiovisual and media industries, as well as broader funding and innovation programmes designed to support creative sectors and digital development [1]. While this framework provides an important foundation for addressing imbalances in platform-based markets, its effectiveness in reducing structural dependencies and enhancing the global competitiveness of European creative industries remains open to debate.

This growing dominance of US platforms presents both opportunities and challenges for European creative industries. On the one hand, these platforms provide unprecedented access to global markets, enabling European creators and firms to scale their reach and visibility. On the other hand, reliance on non-European digital infrastructures can limit the development of domestic platforms, reduce control over data and monetisation mechanisms, and create structural dependencies that may weaken Europe’s long-term competitiveness. The European Union currently relies on non-EU countries for over 80% of key digital products, services, infrastructure and intellectual property [2].

The issue of European competitiveness becomes increasingly complex. The EU faces the challenge of fostering innovation and supporting its creative sectors while competing with technologically advanced and well-capitalised ecosystems in the United States. This matter is particularly relevant in the context of the broader EU industrial and digital strategy, which seeks to strengthen strategic autonomy, promote fair competition and ensure sustainable economic growth . According to the Commission President Ursula von der Leyen in the 2025 State of the Union, Europe’s technological sovereignty is key to strengthening competitiveness, resilience and strategic autonomy in a fast-changing digital world [3]. Policy initiatives such as the Digital Services Act, the Digital Markets Act, EU Startup and Scaleup Strategy aim to address some of these imbalances by regulating platform behavior and enhancing market transparency.  

This paper examines how the dominance of US digital platforms shapes the competitiveness of Europe’s creative industries. It argues that while platformisation enables market expansion and innovation, it also creates structural challenges related to dependency, value capture and competitive positioning. By analysing the role of digital platforms, their impact on European creative sectors and the effectiveness of EU policy responses. This study aims to provide a clearer understanding of the opportunities and constraints facing Europe in the evolving digital creative economy.

1. European Creative Industries: Structure, Economic Role and Platformisation

The cultural and creative industries (CCIs) represent a strategically important component of the European economy, combining both economic and cultural value. According to Eurostat figures, in 2024, there were 7.9 million people in cultural employment across the EU, 3.8% of the total employment, representing 1.2 million enterprises, highlighting their importance not only as cultural assets but also as key economic actors [4]. This highlights not only the scale of the sector but also its structural reliance on small, often resource-constrained actors operating within highly competitive and fragmented markets. The CCIs encompass a wide range of sub-sectors, according to the United Nations Conference on Trade and Development (UNCTAD) classifies cultural and creative industries into creative goods and creative services [5], where creative goods are organised into seven broad groups, including art crafts, design, audiovisuals, visual arts, new media, performing arts, and publishing comprising multiple subcategories, while creative services encompass key activities such as advertising, research and development, architectural and engineering services, audiovisual and computer services, information services, and various forms of intellectual property-related revenues. The statistical representation of the cultural and creative sector in the EU highlights its growing role in international trade, particularly in cultural goods. In 2024, extra-EU exports of cultural goods reached approximately €31.5 billion, reflecting a significant increase of over 40% compared to 2019, alongside a strengthening trade surplus [6]. Despite this growth, cultural goods account for a relatively small share of total EU trade, representing around 1.2% of extra-EU exports and 0.8% of imports, indicating the niche nature and specialised value of the sector.  Trade patterns also reveal strong intra-EU integration, with a substantial proportion of cultural goods exchanges occurring within the single market, while key export categories such as jewellery, works of art, and books dominate the EU’s external cultural trade profile. Increasingly, digital-native sectors such as gaming and online content creation have become central components of this ecosystem. These industries are not only economically significant but also generate substantial spill-over effects, fostering innovation, supporting entrepreneurship, and contributing to sectors such as tourism, manufacturing, and digital services. At the societal level, CCIs play a key role in promoting cultural diversity, social cohesion and community development.

Structurally, European creative industries are characterised by three defining features. First, they operate within fragmented markets, shaped by linguistic, cultural, and regulatory diversity across Member States, which limits the ability of firms to scale. Second, the sector is dominated by SMEs and micro-enterprises, which often lack the financial and technological capacity to compete with large global actors. Third, cultural diversity remains both a strength and a challenge, as it underpins Europe’s unique creative output while simultaneously complicating market integration and international competitiveness. Within this context, the rise of the platform economy has fundamentally reshaped the organisation and functioning of creative industries. Digital platforms operate as multi-sided markets, facilitating interactions between creators, consumers, advertisers and intermediaries, while benefiting from strong network effects, whereby the value of the platform increases with the number of users. Major platforms such as streaming services and social media have become key infrastructures for the production, distribution and monetisation of creative content.

A key trend emerging from this transformation is the platformisation of creative industries, whereby digital platforms increasingly mediate not only distribution but also the conditions of production and value creation. Platforms act not only as marketplaces but also as “matchmakers and taste-makers” [7], determining what content is visible and successful in increasingly data-driven environments. At the same time, platformisation is closely linked to the rapid expansion of digital labour markets in the European Union. By 2025, the EU platform economy is estimated to involve around 43 million workers, up from approximately 28.3 million in 2022 [8], reflecting the growing importance of platform-mediated work across sectors. This growth is accompanied by significant economic expansion, with platform work revenues increasing sharply from €3.4 billion in 2016 to €14 billion in 2020 [8], highlighting the accelerating integration of platforms into the European economy. The sector remains highly concentrated in ride-hailing and food delivery, which account for roughly 75% of platform revenues, although creative and digital content platforms represent a distinct and increasingly influential segment. The EU platform ecosystem is also structurally diverse, comprising over 500 active digital labour platforms, the majority of which originate within the EU (77%), although non-European platforms, particularly from North America capture a substantial share of earnings. This reflects a broader pattern of asymmetry in the platform economy, where European actors are well represented in terms of platform presence but face stronger competition in terms of scale, data accumulation and global reach.

From a creative industries perspective, platformisation has introduced opportunities and structural challenges. On the one hand, platforms significantly reduce barriers to entry, enabling creators to access global audiences, distribute content at near-zero marginal cost and experiment with new forms of digital production. The unbundling of content and the proliferation of user-generated content have led to an explosion in creative supply, fundamentally altering traditional industry structures. On the other hand, platforms concentrate control over key resources, particularly data, algorithms, and access to audiences, which enhances their market power and creates new dependencies for creators. Their business models rely on network effects and data-driven optimisation, allowing them to shape consumer preferences and influence production decisions. As platforms expand, they increasingly move into content production themselves, further reinforcing their dominance and reducing the role of traditional intermediaries. These dynamics contribute to a reconfiguration of value creation and distribution within the creative economy. While platforms capture a growing share of value, creators often face declining revenues, limited bargaining power, and increased precarity, as risks are shifted onto the creative workforce. At the same time, algorithmic curation and monetisation models may prioritise engagement-driven content over diversity and innovation, with potential implications for cultural variety and long-term competitiveness.

2. US Platform Dominance

US platform dominance in the cultural and creative sectors is shaped by a small group of major actors operating across streaming, social media and digital distribution platforms, including companies such as Amazon, Microsoft, Google, OpenAI, Anthropic and others. Their dominance is driven by structural advantages such as control over large-scale data, the ability to leverage global scale and capital, advanced algorithmic systems that shape content visibility and consumption, and their gatekeeping role over key digital infrastructures. In the European context, this dominance is reflected in clear statistical asymmetries. US cloud providers account for more than 70% of the European market, while European providers hold less than 15% as of 2025 [9]. In enterprise software, at least 59% of the market is controlled by US firms, with Microsoft and Oracle alone accounting for significant shares (around 10% and 18% respectively)[9]. In customer relationship management systems, US companies command at least two-thirds of the EU market, with Salesforce as the dominant actor. More broadly, the EU is estimated to rely on non-EU providers for over 80% of its digital products, services, infrastructure and intellectual property [2].

This high level of dependency creates significant vulnerabilities. The concentration of digital infrastructure in the hands of a few US firms exposes Europe to risks linked to geopolitical tensions, regulatory asymmetries (such as extraterritorial data access under US law) and potential systemic disruptions. Consequently, digital sovereignty has become a central policy objective within the EU. In response, European policymakers are promoting strategies aimed at reducing dependency, including investments in domestic technological capacity, support for open-source ecosystems and initiatives to build independent infrastructure. However, given the scale of existing dominance and the financial requirements involved estimated in the hundreds of billions of euros — full decoupling remains unrealistic in the short term, and transatlantic technological interdependence is expected to continue.

3. Impact on Competitiveness: Challenges and Opportunities for Enterprises in the European Union

The platformisation of the creative economy has fundamentally reshaped the competitive environment for European creative enterprises. Digital platforms have lowered market entry barriers and enabled creators and firms to reach global audiences with relatively limited resources. At the same time, the increasing concentration of market power among a small number of global platform operators has created structural dependencies that affect the competitiveness, bargaining power and long-term sustainability of European businesses. One of the principal challenges stems from the high level of market concentration. In cloud infrastructure alone, Amazon Web Services (AWS), Microsoft Azure and Google Cloud control more than 70% of the European market, while European providers account for less than 15%[10]. For firms operating in the creative industries, this dependence means limited control over access to markets and consumers. Streaming platforms, app stores, social media and online marketplaces determine the visibility of creative products through proprietary algorithms and recommendation systems. As a result, businesses increasingly compete not only on product quality but also on platform-specific optimisation strategies, advertising expenditure and algorithmic visibility.

The platform economy nevertheless offers substantial opportunities. Digital platforms enable small and medium-sized enterprises, freelancers and creative entrepreneurs to internationalise rapidly without significant investment in physical distribution networks. The creative sector particularly benefits from lower transaction costs, direct-to-consumer sales models and access to global audiences through streaming, digital publishing and online marketplaces.

However, the benefits of platformisation are not distributed equally across the creative economy. Although digital platforms have substantially increased the consumption and circulation of creative content, the resulting revenues remain concentrated among major platforms, rights holders and the most popular creators. In the European music market, for example, streaming has become the dominant way audiences access music, yet the European Parliament has highlighted persistent inequalities in revenue distribution, with the majority of authors and performers receiving very low compensation while revenues are concentrated among major labels and the most successful artists. A similar imbalance can be observed in the audiovisual sector. The European audiovisual market was valued at approximately €142 billion, while non-European players accounted for 89% of revenues from streaming and video-sharing platforms in 2024 [11]. At the same time, royalties collected for online and on-demand uses represented only around 13% of total audiovisual authors’ collections, illustrating the gap between the growing importance of digital distribution and the value returned to creators [12]. These developments illustrate what has been described as a “value gap”: platforms increasingly occupy strategic positions between producers and audiences, while creators and smaller European firms do not necessarily receive a proportional share of the value generated by the growing consumption of digital content [13].

The benefits of platformisation are not distributed evenly across market participants. The rapid expansion of the EU platform economy has been accompanied by a high degree of concentration, with platform revenues increasing from €3.4 billion in 2016 to €14 billion in 2020, while approximately 75% of these revenues were generated by taxi and food-delivery platforms. This illustrates the strong economies of scale and network effects that favour large platforms once they achieve a substantial user base. Similar dynamics are evident in creative industries, where dominant streaming, social media and distribution platforms occupy key positions in the value chain. By controlling access to audiences, data, recommendation systems and monetisation mechanisms, these platforms can capture a significant share of the economic value generated by creative content, potentially limiting the revenues and bargaining power of smaller European firms and creators.

European enterprises also face disadvantages related to investment capacity and innovation financing. US technology companies benefit from significantly larger capital markets, extensive venture capital ecosystems and higher research and development expenditure, allowing continuous investment in artificial intelligence, cloud infrastructure and platform technologies. In contrast, many European creative technology firms encounter difficulties in scaling across fragmented national markets, limiting their ability to compete globally. Europe also lags behind the US and China in developing globally competitive AI companies and remains dependent on foreign digital infrastructure, with over 90% of global AI data-centre capacity controlled by the US and China [14]. These structural challenges limit the competitiveness of European creative enterprises, while reinforcing the need for greater technological sovereignty and investment in domestic digital capabilities. At the same time, these challenges have accelerated European policy initiatives aimed at strengthening digital sovereignty and competitiveness. Programmes supporting open-source technologies, trusted cloud infrastructure, data spaces and the EuroStack initiative seek to reduce strategic dependencies while fostering domestic innovation ecosystems. Although estimates suggest that achieving a competitive European digital infrastructure could require investments of approximately €300 billion over the next decade, these initiatives are intended to improve the resilience and long-term competitiveness of European enterprises [15]. In this case, the platformisation presents a dual effect on EU competitiveness, it expands opportunities for innovation, entrepreneurship and international market access while simultaneously increasing dependence on dominant global platforms that control digital infrastructure, consumer data and market access. Strengthening Europe’s technological capabilities, investment capacity and regulatory framework will therefore be essential to ensuring that European creative enterprises remain competitive in the evolving platform economy.

4. EU Policy Response

In response to the growing influence of large digital platforms, the European Union has developed a broad regulatory and support framework covering competition, digital services, audiovisual media, data, innovation and the cultural sector. Key instruments include the Digital Markets Act (DMA), which provides a targeted framework for addressing the market power of large digital gatekeepers, and the Digital Services Act (DSA), which establishes common rules for online platforms and aims to support a safer and more competitive digital environment. Sector-specific measures are particularly relevant to creative industries. The Audiovisual Media Services Directive (AVMSD) regulates television, on-demand and certain video-sharing services and requires on-demand services to promote European works, including through a 30% European content share [16]. Alongside regulation, programmes such as Creative Europe and its MEDIA strand support the development, distribution and internationalisation of European audiovisual content [17], while broader initiatives such as Horizon Europe, the Digital Europe Programme, the EU Data Strategy, the Data Governance Act and the European Industrial Strategy seek to strengthen innovation, digital capacity and the competitiveness of European enterprises [18]. The overall policy framework is therefore aimed not only at limiting the negative effects of platform concentration, but also at creating conditions in which European creative firms can innovate, scale and compete internationally.

Conclusion

The analysis shows that US platform dominance has a dual effect on the competitiveness of Europe’s creative industries. Digital platforms provide European enterprises with access to global audiences, new distribution channels, lower barriers to entry and opportunities for innovation. At the same time, dependence on a small number of powerful platforms creates structural disadvantages through concentrated market power, control over data and algorithms, unequal value capture and limited bargaining power for European firms and creators. Europe’s fragmented markets and comparatively weaker capacity to finance and scale digital companies further reinforce this competitive gap. EU policies provide an important regulatory and institutional foundation, but regulation alone is unlikely to eliminate these structural asymmetries. The key challenge is therefore to combine effective regulation with stronger investment, innovation, data capabilities and scaling opportunities for European enterprises. For the creative industries, European competitiveness will depend not on withdrawing from platform markets, but on ensuring that European firms and creators can participate in them on more balanced and sustainable terms.

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