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COMMISSION FREE DIGITAL MARKETPLACES AS PUBLIC SERVICE: A POLICY AND DESIGN FRAMEWORK
For most of recorded history, the market square was public infrastructure: towns provided the square, merchants sold in the square, and no private owner collected a percentage of every sale. In the digital era, the market square has moved online and has been captured by a small number of large foreign corporations, which charge commissions of ten to thirty percent on every sale, promote paid listings instead of better products, and move both profits and citizen purchasing data abroad; our paper therefore asks how national governments can take the market square back. Our paper answers by introducing Commission Free Digital Marketplaces as Public Service, defined as digital marketplaces built, owned, and operated by the national government, charging no commission to buyers or sellers, ranking products by verified purchase feedback instead of paid promotion, and open to every citizen and every domestic company on equal terms. Our paper argues that digital matching costs almost nothing, so commissions are economic rent; that commissions paid to foreign operators leave the national economy permanently; that automatic tax settlement at the moment of sale lets citizens sell without declarations, invoices, or accountants; and that a government, already taxing the whole economy, is the only marketplace operator whose rational commission rate equals zero. Using design science, causal mechanism mapping, and comparative analysis of working precedents, including the government operated procurement marketplace and open commerce network of India, our paper anticipates five findings: transaction volumes rise as commission rent leaves prices; participation widens toward the smallest sellers; informal activity becomes formal at unchanged tax rates; product quality improves under honest ranking; and used goods circulate longer, because zero commission makes low value resale economical, cutting waste and lowering costs for poorer citizens. Commission Free Digital Marketplaces as Public Service also strengthen national security, because citizen purchase records stop accumulating under foreign jurisdiction, while the companion doctrine of Fiscal Secularity keeps citizen purchase records sealed against domestic misuse. Named open parameters for evaluation through staged national pilots include seller savings, formalization rates, secondary market volumes, and consumer price effects. Our paper recommends that governments treat digital marketplaces as public infrastructure, alongside roads and postal services, under six design principles: public operation, zero commission, equal access, operator neutrality, honest ranking, and sealed records.
1. INTRODUCTION
For most of recorded history, the market square was public infrastructure. Towns provided the square, merchants brought goods into the square, buyers and sellers met on equal terms, and no private owner collected a percentage of every sale made in the square. The square belonged to the town for the same reason roads belonged to the town: exchange is the bloodstream of a community, and no community can afford to let a private landlord tax the bloodstream.
In the digital era, the market square has moved online, and the online market square has been captured. A small number of large foreign corporations now operate the dominant marketplaces for goods, for services, and for experiences in most countries of the world. The industry average take rate for online marketplaces runs from ten to thirty percent of every sale, with application stores charging thirty percent and food delivery platforms reaching forty percent before regulators intervened. The same corporations decide which products are promoted, sell ranking positions to the highest bidder, collect the purchase histories and home addresses of entire populations under foreign jurisdiction, and move the resulting profits to wherever taxation is lightest. A privately owned tollbooth now stands on the bloodstream of every digital economy.
Our paper asks a direct question: how can national governments take the market square back? Our paper answers by introducing and developing the concept of Commission Free Digital Marketplaces as Public Service, defined as digital marketplaces that are built, owned, and operated by the national government as public infrastructure, that charge no commission to buyers or sellers, that rank products by verified purchase feedback instead of paid promotion, and that remain open to every citizen and every domestic company on equal terms.
Our paper makes four contributions. First, our paper supplies the missing doctrine: existing scholarship regulates private platforms or proposes open protocols, while our paper specifies the full public-operation design and names the design as a public service, in the same category as roads, water networks, and postal delivery. Second, our paper proves an alignment result: among all possible marketplace operators, only a government has no rational interest in charging any commission at all, because a government already collects taxes on the whole economy and therefore maximizes revenue by maximizing transactions, not by maximizing the take rate. Third, our paper bundles the marketplace with a constitutional protection called Fiscal Secularity, under which all records remain sealed by default and no domestic authority may browse citizen purchases without a judicially gated, logged, and citizen-visible procedure; the bundle, not the marketplace alone, is the contribution, because a public marketplace without sealed records would merely replace a foreign watcher with a domestic watcher. Fourth, our paper defines a falsifiable evaluation program with named open parameters and staged national pilots, so the framework can be tested rather than merely admired.
The remainder of our paper proceeds as follows. Section 2 defines the concept and the six design principles. Section 3 supplies the theoretical foundation. Section 4 reviews working precedents and locates the gap our paper fills. Section 5 presents the four arguments for public operation. Section 6 explains why price regulation of private platforms fails and why a public option succeeds. Section 7 develops operator neutrality and honest ranking. Section 8 derives five growth channels as anticipated findings. Section 9 develops the national security argument and the Fiscal Secularity boundary. Section 10 describes system architecture and governance. Section 11 answers objections. Section 12 states the research design, open parameters, and evaluation procedure. Section 13 acknowledges limitations. Section 14 states implications and recommendations, and Section 15 concludes.
2. DEFINITIONS AND DESIGN PRINCIPLES
A Commission Free Digital Marketplace as Public Service is a digital platform on which citizens and companies buy and sell products, services, and experiences, possessing six constitutive properties.
Principle 1: Public operation. The national government builds, owns, and operates the marketplace, exactly as the national government builds, owns, and operates roads and postal networks. Public ownership does not forbid contracting private engineering firms for construction and maintenance; public ownership forbids private control over the rules of exchange.
Principle 2: Zero commission. The operator charges no percentage fee on any sale. The postal analogy carries the intuition: a postal service delivers a parcel for a flat, cost-based fee and never demands a percentage of the parcel's value, because infrastructure charges costs, never value-percentage rents. One precision prevents confusion: a universal transaction tax collected by the state on all payments everywhere is a tax, not a commission; a commission is a private rent charged for access to the exchange layer. Zero commission means zero rent on top of whatever taxes already apply to every payment in the economy.
Principle 3: Equal access. Every citizen and every domestic company may list and sell on equal terms. No seller can purchase placement, and no official decides who deserves entry beyond ordinary product-safety law.
Principle 4: Operator neutrality. The operator is constitutionally barred from selling anything on the marketplace. The owner of the market square must not also be a merchant on the square, because an owner-merchant faces a permanent conflict of interest documented at length in the economics literature reviewed in Section 7.
Principle 5: Honest ranking. Products and sellers are ranked by verified purchase feedback and by relevance, never by paid promotion. Because every purchase on the marketplace is tied to a real, payment-verified identity, reviews can be restricted to genuine verified buyers, making fake reviews structurally difficult rather than merely forbidden.
Principle 6: Sealed records. All transaction records are immutable, sealed by default, and conditionally accessible only through a judicial gate; every access is logged, and the log entry is permanently visible to the affected citizen. Section 9 develops the sealed-records doctrine in full.
The definition deliberately covers three transaction families: physical goods, both new and used; services, including transport rides, repairs, and professional work; and experiences, including short term accommodation stays, tours, and event tickets. The definition deliberately excludes three readings. The concept is not nationalization, because existing private platforms continue to operate and must merely compete against an operator that needs no rent. The concept is not a state monopoly on commerce, because sellers remain private citizens and private companies who set prices freely, while the state operates only the exchange layer. The concept is not a surveillance instrument, because Principle 6 removes the possibility by construction.
3. THEORETICAL FOUNDATION
Tools versus production. Our paper rests on one master distinction. Money, credit, marketplaces, taxation systems, and bureaucracies are tools of an instrumental layer; growing food, building houses, manufacturing devices, and caring for people are production, the only terminal value. A tool is justified exactly to the degree the tool serves production, and a well-designed instrumental layer is thin, cheap, and unable to mistake collecting rent for creating value. The lineage of the distinction runs from Aristotle's separation of household provisioning from wealth acquisition for wealth's own sake (Aristotle, Politics, Book I) to the classical economists' description of money as a veil. A commission of ten to thirty percent on every exchange is the exchange tool serving the exchange tool. Our framework makes the exchange tool as thin as a road.
Network effects as public goods. A marketplace is valuable because everyone is there, exactly as a language is valuable because everyone speaks the language. Economics has long recognized network externalities as the engine of platform value (Katz and Shapiro, 1985) and has long recognized public goods as goods that markets underprovide or misprice (Samuelson, 1954). Our paper joins the two recognitions: a network effect is a collective creation of all participants, and when a network effect is privately owned, the owner installs a tollbooth on a collective creation and taxes the coordination of an entire society. Roads, language, currency, and measurement standards are all publicly held network effects. Our paper argues that the national marketplace belongs on the same list. Legal scholarship reaches the same destination from the public utility tradition, diagnosing dominant platforms as the core infrastructure of the modern economy and naming the creation of public options among the principal remedies for private control of infrastructural goods (Rahman, 2018a; Rahman, 2018b). Political-economic scholarship supplies the operating model: public options, meaning reasonably priced government-provided services coexisting with private options, have a long and successful history in libraries, postal delivery, schooling, and pensions, and perform best exactly where access is fundamental, where markets malfunction through monopoly or externalities, and where government accountability is feasible (Sitaraman and Alstott, 2019). The digital marketplace passes all three tests.
4. PRIOR ART AND THE GAP
Partial precedents exist on three continents, and the precedents prove feasibility of every component while combining the components nowhere.
A government operated marketplace at national scale exists, but only for government buyers. India's Government e Marketplace, launched in 2016 and owned by a fully government-owned, non-profit special purpose vehicle, serves as the national public procurement portal. The platform has processed a cumulative gross merchandise value of approximately 18.4 trillion rupees, roughly 198 billion United States dollars, including more than 5 trillion rupees in the 2025-26 financial year alone. Micro and small enterprises fulfilled 68 percent of all orders in the same year and formed 73 percent of active sellers, an inclusion record almost no private marketplace matches. An independent World Bank assessment found average buyer savings of about 9.75 percent against median prices, and the platform's own reporting attributes roughly 8 percent savings to competitive bidding. The platform's published principles include treating all sellers fairly and offering no promotional treatment to any seller, and onboarding reaches remote sellers through more than one hundred fifty thousand post offices. A private engineering consortium maintains the platform under the stewardship of the public owner, demonstrating public ownership with contracted private construction (Ministry of Commerce and Industry, India, 2016-2026; World Bank assessment as reported). The gap: government entities are the only buyers, so citizens cannot buy on the marketplace.
A citizen-facing open commerce network exists, but as a protocol rather than as a public operator. India's Open Network for Digital Commerce, incorporated in late 2021 under the Department for Promotion of Industry and Internal Trade, was created explicitly against the concentration of electronic commerce into a small cohort of dominant platforms. The network is a set of open specifications rather than an application, connecting independent buyer applications and seller applications. Within four years the network processed more than 350 million cumulative transactions across retail, mobility, and logistics, and in the food delivery segment reduced consumer prices by roughly 15 to 20 percent through reduced platform commissions and increased competition. The network also unbundles logistics, letting any seller obtain competing delivery quotations, and pilots flow-based lending, under which merchants obtain credit against transaction history instead of physical collateral (Department for Promotion of Industry and Internal Trade, 2022-2025). The gap: private participant applications still stand between citizen and sale, still charge fees, and the state operates nothing.
Sealed-but-logged public data infrastructure exists, but carries no marketplace. Estonia's X-Road data exchange layer, in operation since 2001 and adopted in more than twenty-five countries, authenticates and logs all incoming data, and Estonia's citizen-facing data tracker has, since 2017, let every citizen review who accessed personal records and for what stated purpose (Information System Authority of Estonia). The International Monetary Fund's analysis of India's digital public infrastructure documents the macroeconomic payoff of state-built digital rails, including compliance costs for bank customer verification falling from roughly twelve dollars to six cents and expenditure savings estimated near 1.1 percent of gross domestic product (Alonso and co-authors, 2023). The gap: the infrastructure carries identity, payments, and records, but no public exchange layer for goods, services, and experiences.
The contribution of our paper is the bundle. No state has yet combined government operation, zero commission, universal citizen access, operator neutrality, honest ranking, and sealed records in one institution. Each component is proven separately; our paper assembles the components into a single doctrine and names the doctrine.
5. FOUR ARGUMENTS FOR PUBLIC OPERATION
Argument 1: Commissions are economic rent. Digital matching of a buyer with a seller costs almost nothing at the margin, while marketplace commissions average ten to thirty percent of transaction value. Network effects concentrate buyers and sellers onto a dominant platform; sellers cannot leave the dominant platform because the buyers are there; and platforms with strong network effects therefore charge commissions far above cost, which is the textbook definition of economic rent. The judiciary has reached a matching conclusion: a United States federal court found a thirty percent application store commission produced what the court called "supracompetitive" pricing and operating margins far exceeding the platform owner's investment, and thirty-six states jointly sued the other dominant application store over the same rate (United States District Court, N.D. California, 2021; State of Utah and others v. Google, 2021). Rent extraction raises consumer prices and lowers seller earnings on every transaction in the economy touched by the platform. A zero-commission public operator deletes the rent without deleting the service.
Argument 2: Commissions paid to foreign operators drain the national economy. When the marketplace operator is a foreign corporation, the commission leaves the national economy on every sale, permanently, like a pipeline exporting a percentage of national retail forever, and the exported margin is frequently booked in low-tax jurisdictions beyond the reach of domestic corporate taxation. The international response proves the diagnosis while failing as a remedy: roughly thirty countries have adopted or proposed digital services taxes of two to seven and a half percent on the local revenues of foreign platforms, precisely because physical-presence rules leave platform profits untaxed, yet empirical investigation shows dominant platforms pass digital services taxes almost entirely onto sellers through increased fees, with sellers passing the increase to consumers (Section 6 develops the failure pattern). Under a commission free public marketplace, the entire margin stays with domestic sellers, and money kept by local sellers re-spends locally with a positive employment multiplier (Moretti, 2010).
Argument 3: Automatic settlement at the moment of sale widens the formal economy. Every sale on a government operated marketplace completes on government infrastructure, so any applicable tax can be settled automatically at the moment of sale, with the seller receiving the net amount and the obligation closed. The empirical foundation is among the strongest in public economics. A randomized audit experiment covering more than forty thousand Danish taxpayers found tax evasion close to zero for income subject to third-party reporting and substantial for self-reported income (Kleven, Knudsen, Kreiner, Pedersen, and Saez, 2011). Randomized experiments across more than four hundred thousand Chilean firms found the value added tax paper trail exerts a preventive deterrence effect with enforcement spillovers up the supply chain (Pomeranz, 2015). The United States tax authority reports an annual tax gap near 458 billion dollars at a voluntary compliance rate near 82 percent, and reports that information reporting and withholding are strongly associated with higher voluntary compliance. A public marketplace makes every sale third-party-reported by construction. Meanwhile compliance costs, running near two percent of gross domestic product in the United States, near thirty percent of collected revenue on average across European studies, and between 1.2 and 1.8 percent of gross domestic product in Canadian estimates, fall away for marketplace sellers, because the transaction stream itself is the bookkeeping. The cognitive dividend compounds the financial dividend: scarcity research shows administrative burden consumes measurable mental bandwidth (Mullainathan and Shafir, 2013; Mani, Mullainathan, Shafir, and Zhao, 2013), so selling without declarations returns attention and courage to precisely the smallest sellers.
Argument 4: The alignment theorem. A private marketplace operator maximizes income equal to take rate multiplied by platform volume, and monopoly power pushes the take rate toward the monopoly optimum. A government is structurally different: government income already grows with total economic volume through taxation of the whole economy, so a government maximizes revenue and welfare together by minimizing friction on exchange. Among all possible marketplace operators, only a government therefore has a rational commission rate of exactly zero. Stated in the vocabulary of Section 3: only a public operator has no incentive to let the exchange tool mistake the exchange tool for the point. The alignment theorem converts the zero-commission principle from generosity into arithmetic.
6. WHY PRICE REGULATION FAILS AND A PUBLIC OPTION SUCCEEDS
An obvious alternative to public operation is regulating private commissions directly. The alternative has been tried, and the record teaches a structural lesson. During the pandemic, cities including San Francisco, Seattle, Washington, and New York capped food delivery commissions, typically at fifteen percent for delivery plus small allowances for other services, against prior commissions reaching thirty to forty percent; New York later made the cap permanent and licensed the industry. Platforms responded by adding new consumer-facing charges in the regulated markets, labeled regulatory response fees or city fees, recouping on the consumer side what regulation had restricted on the restaurant side, and academic evaluations found order volumes and revenues fell for independent restaurants in capped jurisdictions (Li and Wang, 2021; Sullivan, working paper). Digital services taxes repeat the pattern at the international level, with documented near-complete pass-through of the tax onto sellers and consumers.
The lesson is structural, not moral: a monopolist whose price is capped on one side of the market reroutes the extraction to the other side, because the monopoly position itself remains intact. Price regulation trims the tollbooth's rates; the tollbooth remains. A public option removes the structure instead of adjusting the price: a zero-commission public marketplace cannot be rerouted around, because the public marketplace competes for the same buyers and sellers and holds the rational rate of zero permanently. Competition from a public option also disciplines surviving private platforms far more durably than case-by-case enforcement, whose difficulty Section 7 documents.
7. OPERATOR NEUTRALITY AND HONEST RANKING
The owner-merchant conflict. Dominant private platforms notoriously operate in a dual mode, running the marketplace while selling own products on the marketplace. Economic theory shows the dual mode creates a steering conflict: a leading model finds the hybrid mode yields higher platform fees for third-party sellers, higher final prices, and less variety, lowering consumer welfare relative to a pure marketplace, through a mechanism of insidious steering in which raising commissions on rivals steers demand toward the platform's own products (Anderson and Bedre-Defolie, 2024). A complementary model shows outright bans on the dual mode can harm welfare, while targeted prevention of imitation and self-preferencing performs better (Hagiu, Teh, and Wright, 2022); surveys of the literature find the trade-offs complex and resistant to blunt prohibition (Etro, 2024; Kittaka, Sato, and Zennyo, 2023). Regulators now attempt the targeted route: the European Union's Digital Markets Act forbids designated gatekeepers from ranking own services more favourably and from using non-public business-user data against the same business users, yet implementation analyses describe detection and monitoring of self-preferencing as complex, resource-intensive, and case-by-case. Our framework resolves the conflict structurally rather than forensically: under Principle 4 the public operator sells nothing, so no self-preferencing incentive exists, no algorithmic audits are needed, and the welfare-superior pure marketplace of the theory literature is instituted by constitution rather than approximated by enforcement. Notably, our framework bans nothing for private actors: private hybrid platforms remain legal, and the public option merely out-competes rent.
Honest ranking. On advertising-funded platforms, ranking follows payment, so citizens see the most promoted products rather than the best products, and markets that reward marketing budgets over quality degrade quality, in the classic logic of markets for lemons (Akerlof, 1970). Review fraud deepens the distortion: peer-reviewed analysis found roughly sixteen percent of reviews on a major review platform filtered as suspicious, with fraud incentives strongest for weak reputations (Luca and Zervas, 2016), and field-experimental work documents manipulation shaped by platform verification design (Mayzlin, Dover, and Chevalier, 2014). Regulators again mirror the concern: a United States trade regulation rule effective October 2024 prohibits fake reviews and purchased review sentiment, with civil penalties per violation and first enforcement sweeps already issued, while the regulator warns that generative artificial intelligence makes fake reviews cheap at scale. A public marketplace holds a structural advantage no private platform can copy: every purchase ties to a real, payment-verified identity on public payment infrastructure, so reviews can be restricted to verified buyers and weighted by verified purchase, making fabrication expensive by construction. Honest signals let quality producers win, and citizens systematically reach better products through real feedback instead of promoted products.
8. FIVE GROWTH CHANNELS: ANTICIPATED FINDINGS
Our paper derives five channels through which the framework contributes to economic growth. Each channel is stated with the causal mechanism and, in Section 12, with the measurement that would falsify the channel.
Channel 1 : The price channel. Zero commission removes ten to thirty percent from the wedge between what buyers pay and what sellers receive; smaller wedges lower final prices, raise seller earnings, or both; lower prices raise transaction volumes. The open-network precedent already displays the direction of the effect, with food delivery prices roughly fifteen to twenty percent lower under reduced commissions. The experiences segment extends the channel to tourism: zero commission on accommodation stays and tours lowers visitor prices while local hosts keep the full amount, improving national tourism competitiveness and increasing foreign income.
Channel 2 : The participation channel. Barriers of commissions, registration hurdles, invoicing duties, and tax anxiety each remove a share of potential sellers; automatic settlement removes every barrier at once, so pensioners, students, and village workshops can sell with zero paperwork. Precedent shows public marketplaces disproportionately activate the smallest sellers, with micro and small enterprises fulfilling 68 percent of orders on India's public procurement marketplace, and physical onboarding through postal networks reaches citizens far from digital life.
Channel 3 : The formalization channel. When formality costs nothing, informal sales migrate voluntarily onto the public marketplace; the tax base widens at unchanged rates, following the third-party-reporting results of Kleven and co-authors and Pomeranz; and every small seller accumulates a verifiable transaction history, which unlocks credit through flow-based lending of the kind already piloted on the Indian open network. The formalization channel connects our paper to companion work on small credits and small banking for citizens.
Channel 4 : The quality channel. Honest ranking under Principle 5 shifts competition from advertising budgets to product quality; quality producers win; sellers redirect advertising spending toward product improvement, since advertising among substitutable products is partly a zero-sum arms race; and industry quality rises.
Channel 5 : The circularity channel. Reselling a used good today requires paying a commission and enduring fixed fees whose percentage burden explodes at low values, with platform fee structures making a five-euro sale cost several times the percentage of a hundred-euro sale, and with platform operators themselves reporting negative unit economics on cheap items; the practical consequence is amputation of the low-value long tail of the secondary market, so cheap used goods are discarded rather than resold. The flagship empirical study of secondary markets shows transaction costs strongly suppress trade volumes and that the welfare losses concentrate on lower-valuation households (Gavazza, Lizzeri, and Roketskiy, 2014). Zero commission makes listing an eight-euro item rational for the first time; listings thicken; buyers follow; goods live longer; waste declines; imports of new goods fall; and poorer citizens gain access to cheaper goods. The market context is already large and growing, with 93 percent of surveyed Americans buying secondhand within a year, a national recommerce market projected above three hundred billion dollars by 2030, most buyers motivated by saving money, and a majority of sellers using proceeds for bills. Extended product life is a positive externality that a commission-charging operator can never monetize, so public provision answers a textbook market failure. The services segment closes the loop by carrying repair services, joining repair, spare parts, and resale into one circular triangle, in synergy with companion work on product standardization and repairability.
9. NATIONAL SECURITY AND THE FISCAL SECULARITY BOUNDARY
Every purchase reveals something: a home address, an income level, a daily routine, a health hint, a family composition. A dominant foreign marketplace aggregates purchase histories, delivery addresses, travel patterns, and consumption habits for a large share of a population, and the aggregate describes national supply dependencies, economic vulnerabilities, and the private lives of officials, soldiers, and judges. The records sit under foreign jurisdiction, where foreign legal process and foreign political pressure can reach the records regardless of domestic law. A government operated marketplace keeps the same records inside national jurisdiction and inside national law.
Repatriating the records must never create a domestic surveillance instrument, and our framework treats the danger as constitutive rather than incidental. Under the companion doctrine of Fiscal Secularity, the constitutional and technical separation of money, taxation, and governance , marketplace records obey three simultaneous properties. The records are immutable, so no authority can edit history. The records are sealed by default, readable by no official without legal cause. The records are conditionally accessible only through a judicial gate limited to serious crimes of theft of funds and fraud, and every access is logged, with the log entry permanently visible to the affected citizen, so watching the watcher becomes a citizen right rather than a promise. Evidence obtained outside the judicial gate is inadmissible. Working precedent exists: Estonia's data exchange layer authenticates and logs all data access, and Estonia's citizen data tracker has shown citizens who accessed personal records, and why, since 2017. The governing sentence of the bundle: a public marketplace without sealed records would merely swap a foreign watcher for a domestic watcher, while a public marketplace with sealed records removes both. A functioning democracy requires that citizens do not fear the money and purchase trails of daily life, and the marketplace inherits the requirement in full.
10. SYSTEM ARCHITECTURE AND GOVERNANCE
Components. The marketplace stack contains seven components, each with working precedent. First, identity: seller and buyer identity binds to the national digital identity used by the payment infrastructure. Second, payments: settlement runs on central-bank payment infrastructure, with taxes settled at the moment of sale and machine-generated receipts attached to every payment. Third, catalog and search: open, standardized product cataloging, with ranking governed by Principle 5. Fourth, logistics: the marketplace owns no delivery fleet; competing private logistics providers quote for every shipment, following the unbundled-logistics precedent, so delivery prices stay competitive. Fifth, reviews: verified-purchase-only reviews, weighted and fraud-screened, under the payment-identity advantage of Section 7. Sixth, disputes: algorithmic-first resolution, with automatic refund and tax clawback when buyer and seller consent, duplicate detection handled without humans, and human arbitration only on appeal, preventing the dispute system from growing into a new bureaucracy; non-consensual harms of theft and fraud route to courts, whose remedies take the form of compensating transactions rather than administrative edits of the ledger. Seventh, statistics: anonymized aggregate market data publishes openly and equally to all sellers, converting the informational hoard of private platforms into a public good and giving national statistics real-time price measurement.
Governance. Four safeguards discipline the operator. First, constitutional entrenchment: zero commission, equal access, operator neutrality, and sealed records are entrenched and deliberately difficult to amend, because historical exceptions expand. Second, published metrics: uptime, cost per transaction, dispute resolution times, and ranking-integrity audits publish quarterly, because the correct performance standards for infrastructure are the standards of roads, namely availability and cost, not profit. Third, contracted engineering with public ownership, following the procurement-marketplace precedent, so state ownership never means state-only construction. Fourth, competitive discipline: private platforms remain legal, so citizens hold an exit option, and the exit option keeps the public operator honest.
11. OBJECTIONS AND ANSWERS
Objection 1: governments cannot build good software. The objection fails empirically at national scale: a fully state-owned marketplace has processed roughly 198 billion dollars cumulatively with documented savings; a state-initiated open network reached hundreds of millions of transactions within four years; and state payment and identity rails in the same country carry the large majority of national payment volume with interoperability praised by the International Monetary Fund. Public ownership with contracted private engineering, under published metrics, is the operating model, and the model already runs.
Objection 2: a zero-commission public operator competes unfairly with private platforms. Roads also compete unfairly with private toll roads, and society calls the outcome infrastructure. The framework bans nothing, expropriates nothing, and merely declines to charge rent on the exchange layer; private platforms may compete on superior service, curation, or specialization. Compatibility with state-aid and international trade rules differs by jurisdiction and is named an open legal parameter in Section 12 rather than assumed away.
Objection 3: without profit motive, the public operator will stagnate. The exchange function is thin, like a road; the correct metrics are availability and cost; surviving private platforms supply competitive discipline; and the governance regime of Section 10 publishes performance quarterly. Where innovation matters most, in logistics and in seller-side services, the framework deliberately leaves provision to competing private firms.
Objection 4: a state marketplace enables state control over commerce and speech. The objection is the most serious, and the objection is exactly why our paper bundles the marketplace with Fiscal Secularity and entrenches equal access constitutionally. The state operates the square; the state does not choose the merchants, cannot browse the stalls without a judge, and leaves a permanent, citizen-visible fingerprint whenever a judge permits a look. A design under which weaponization is simultaneously illegal and technically expensive protects citizens better than any private platform's terms of service ever has.
Objection 5: measured growth will be mere migration from private platforms. Partly true, and Section 12 therefore separates transfers from creation: migrated volume is a transfer, while genuine growth appears only through the five channels, each independently measurable.
12. RESEARCH DESIGN, OPEN PARAMETERS, AND EVALUATION PROCEDURE
Our paper is a position and design paper, and the research design follows three methods. First, design science: Sections 2 and 10 specify an artifact precisely enough to build. Second, causal mechanism mapping: Sections 5 through 9 state every claimed benefit as an explicit causal chain from design property to measurable outcome, each chain anchored in peer-reviewed literature or documented precedent. Third, comparative precedent analysis: Section 4 extracts feasibility evidence and design lessons from the procurement marketplace, the open commerce network, and the sealed-records infrastructure.
The evaluation procedure is a staged national pilot. Stage one runs the marketplace in one region and two verticals, one goods vertical and one services vertical, chosen for measurable baselines. Stage two adds the used-goods segment and the experiences segment. Stage three scales nationally. Measurement at every stage separates transfers from creation using seller-level histories.
Named open parameters, with the observable that resolves each parameter: first, seller savings, measured as the effective take-rate difference retained by sellers, with the anticipated finding of near-full retention of the former commission; second, price effects, measured against matched offline and private-platform baselines, with the anticipated finding of consumer price declines in high-commission verticals, following the fifteen to twenty percent food delivery precedent; third, participation, measured as first-time sellers per thousand adults, with the anticipated finding of disproportionate entry by the smallest sellers; fourth, formalization, measured as previously unreported activity appearing in third-party-reported form at unchanged rates, following the third-party-reporting literature; fifth, secondary market volume, measured as listings and completed sales below a low-value threshold, with the anticipated finding of long-tail revival; sixth, quality dynamics, measured through verified-review distributions and return rates; seventh, operating cost per transaction, benchmarked against infrastructure standards; eighth, the legal parameter, namely state-aid and trade-rule compatibility across jurisdictions. Each anticipated finding is falsifiable: flat volumes, absent formalization, or a dead long tail would each disconfirm the corresponding channel.
13. LIMITATIONS
Our paper acknowledges five limitations honestly. First, migration versus creation: a fraction of observed activity will be transfer from private platforms, and only the staged measurement design separates the fraction. Second, state capacity varies: the precedents come from states with strong digital infrastructure traditions, and the framework presupposes, or must first build, national digital identity and public payment rails. Third, legal compatibility with state-aid and trade regimes remains an open parameter, not a settled conclusion. Fourth, capture risk: a future government may attempt to bend ranking, access, or records; the constitutional entrenchment and citizen-visible access logs are designed against the risk, and the design is a bet on institutions, stated as a bet. Fifth, the balance literature counsels humility: careful models show blunt interventions against private platforms can harm welfare, which is precisely why the framework intervenes by adding a neutral public option rather than by banning private modes.
14. IMPLICATIONS AND DESIGN RECOMMENDATIONS
For policy, our paper recommends that governments classify digital marketplaces as public infrastructure, in the same budgetary and constitutional category as roads and postal services, and build under the six design principles: public operation, zero commission, equal access, operator neutrality, honest ranking, and sealed records. For sequencing, our paper recommends payments and identity first, the goods marketplace second, services and experiences third, and the used-goods long tail as the deliberate early showcase, because the circularity channel delivers visible citizen benefit fastest and threatens incumbents least. For the wider research program, the marketplace is one application of one axiom, the instrumental layer of an economy exists to serve production and should be as thin as possible, and the marketplace paper therefore stands beside companion work on automated transaction taxation, on Fiscal Secularity, on small banking, and on universal capital endowments as parts of a single structural argument. For scholarship, the alignment theorem of Section 5 and the network-effects-as-public-goods claim of Section 3 invite formalization and testing beyond the pilot program described above.
15. Conclusion
The market square was public for most of recorded history, and the privatization of the digital market square is an accident of sequence, not a law of nature: private firms simply built first on new terrain. Our paper has argued that the terrain is infrastructure; that commissions of ten to thirty percent are rent on a collective creation; that only a government can rationally operate the exchange layer at the true price of zero; that automatic settlement turns the marketplace into the simplest tax system ever operated, following the strongest results in empirical public economics; that honest ranking and payment-verified reviews repair the information channel on which product quality depends; that zero commission revives the amputated long tail of used goods, cutting waste and helping poorer citizens most; and that sealed, judicially gated, citizen-visible records keep the whole construction loyal to the citizens who own the square. Every component runs somewhere today. The contribution of our paper is the assembled doctrine, the arithmetic of alignment, and the falsifiable program by which any government can test the claim. The town square belongs to the town. Our paper has described how to build the digital one.
For most of recorded history, the market square was public infrastructure: towns provided the square, merchants sold in the square, and no private owner collected a percentage of every sale. In the digital era, the market square has moved online and has been captured by a small number of large foreign corporations, which charge commissions of ten to thirty percent on every sale, promote paid listings instead of better products, and move both profits and citizen purchasing data abroad; our paper therefore asks how national governments can take the market square back. Our paper answers by introducing Commission Free Digital Marketplaces as Public Service, defined as digital marketplaces built, owned, and operated by the national government, charging no commission to buyers or sellers, ranking products by verified purchase feedback instead of paid promotion, and open to every citizen and every domestic company on equal terms. Our paper argues that digital matching costs almost nothing, so commissions are economic rent; that commissions paid to foreign operators leave the national economy permanently; that automatic tax settlement at the moment of sale lets citizens sell without declarations, invoices, or accountants; and that a government, already taxing the whole economy, is the only marketplace operator whose rational commission rate equals zero. Using design science, causal mechanism mapping, and comparative analysis of working precedents, including the government operated procurement marketplace and open commerce network of India, our paper anticipates five findings: transaction volumes rise as commission rent leaves prices; participation widens toward the smallest sellers; informal activity becomes formal at unchanged tax rates; product quality improves under honest ranking; and used goods circulate longer, because zero commission makes low value resale economical, cutting waste and lowering costs for poorer citizens. Commission Free Digital Marketplaces as Public Service also strengthen national security, because citizen purchase records stop accumulating under foreign jurisdiction, while the companion doctrine of Fiscal Secularity keeps citizen purchase records sealed against domestic misuse. Named open parameters for evaluation through staged national pilots include seller savings, formalization rates, secondary market volumes, and consumer price effects. Our paper recommends that governments treat digital marketplaces as public infrastructure, alongside roads and postal services, under six design principles: public operation, zero commission, equal access, operator neutrality, honest ranking, and sealed records.
1. INTRODUCTION
For most of recorded history, the market square was public infrastructure. Towns provided the square, merchants brought goods into the square, buyers and sellers met on equal terms, and no private owner collected a percentage of every sale made in the square. The square belonged to the town for the same reason roads belonged to the town: exchange is the bloodstream of a community, and no community can afford to let a private landlord tax the bloodstream.
In the digital era, the market square has moved online, and the online market square has been captured. A small number of large foreign corporations now operate the dominant marketplaces for goods, for services, and for experiences in most countries of the world. The industry average take rate for online marketplaces runs from ten to thirty percent of every sale, with application stores charging thirty percent and food delivery platforms reaching forty percent before regulators intervened. The same corporations decide which products are promoted, sell ranking positions to the highest bidder, collect the purchase histories and home addresses of entire populations under foreign jurisdiction, and move the resulting profits to wherever taxation is lightest. A privately owned tollbooth now stands on the bloodstream of every digital economy.
Our paper asks a direct question: how can national governments take the market square back? Our paper answers by introducing and developing the concept of Commission Free Digital Marketplaces as Public Service, defined as digital marketplaces that are built, owned, and operated by the national government as public infrastructure, that charge no commission to buyers or sellers, that rank products by verified purchase feedback instead of paid promotion, and that remain open to every citizen and every domestic company on equal terms.
Our paper makes four contributions. First, our paper supplies the missing doctrine: existing scholarship regulates private platforms or proposes open protocols, while our paper specifies the full public-operation design and names the design as a public service, in the same category as roads, water networks, and postal delivery. Second, our paper proves an alignment result: among all possible marketplace operators, only a government has no rational interest in charging any commission at all, because a government already collects taxes on the whole economy and therefore maximizes revenue by maximizing transactions, not by maximizing the take rate. Third, our paper bundles the marketplace with a constitutional protection called Fiscal Secularity, under which all records remain sealed by default and no domestic authority may browse citizen purchases without a judicially gated, logged, and citizen-visible procedure; the bundle, not the marketplace alone, is the contribution, because a public marketplace without sealed records would merely replace a foreign watcher with a domestic watcher. Fourth, our paper defines a falsifiable evaluation program with named open parameters and staged national pilots, so the framework can be tested rather than merely admired.
The remainder of our paper proceeds as follows. Section 2 defines the concept and the six design principles. Section 3 supplies the theoretical foundation. Section 4 reviews working precedents and locates the gap our paper fills. Section 5 presents the four arguments for public operation. Section 6 explains why price regulation of private platforms fails and why a public option succeeds. Section 7 develops operator neutrality and honest ranking. Section 8 derives five growth channels as anticipated findings. Section 9 develops the national security argument and the Fiscal Secularity boundary. Section 10 describes system architecture and governance. Section 11 answers objections. Section 12 states the research design, open parameters, and evaluation procedure. Section 13 acknowledges limitations. Section 14 states implications and recommendations, and Section 15 concludes.
2. DEFINITIONS AND DESIGN PRINCIPLES
A Commission Free Digital Marketplace as Public Service is a digital platform on which citizens and companies buy and sell products, services, and experiences, possessing six constitutive properties.
Principle 1: Public operation. The national government builds, owns, and operates the marketplace, exactly as the national government builds, owns, and operates roads and postal networks. Public ownership does not forbid contracting private engineering firms for construction and maintenance; public ownership forbids private control over the rules of exchange.
Principle 2: Zero commission. The operator charges no percentage fee on any sale. The postal analogy carries the intuition: a postal service delivers a parcel for a flat, cost-based fee and never demands a percentage of the parcel's value, because infrastructure charges costs, never value-percentage rents. One precision prevents confusion: a universal transaction tax collected by the state on all payments everywhere is a tax, not a commission; a commission is a private rent charged for access to the exchange layer. Zero commission means zero rent on top of whatever taxes already apply to every payment in the economy.
Principle 3: Equal access. Every citizen and every domestic company may list and sell on equal terms. No seller can purchase placement, and no official decides who deserves entry beyond ordinary product-safety law.
Principle 4: Operator neutrality. The operator is constitutionally barred from selling anything on the marketplace. The owner of the market square must not also be a merchant on the square, because an owner-merchant faces a permanent conflict of interest documented at length in the economics literature reviewed in Section 7.
Principle 5: Honest ranking. Products and sellers are ranked by verified purchase feedback and by relevance, never by paid promotion. Because every purchase on the marketplace is tied to a real, payment-verified identity, reviews can be restricted to genuine verified buyers, making fake reviews structurally difficult rather than merely forbidden.
Principle 6: Sealed records. All transaction records are immutable, sealed by default, and conditionally accessible only through a judicial gate; every access is logged, and the log entry is permanently visible to the affected citizen. Section 9 develops the sealed-records doctrine in full.
The definition deliberately covers three transaction families: physical goods, both new and used; services, including transport rides, repairs, and professional work; and experiences, including short term accommodation stays, tours, and event tickets. The definition deliberately excludes three readings. The concept is not nationalization, because existing private platforms continue to operate and must merely compete against an operator that needs no rent. The concept is not a state monopoly on commerce, because sellers remain private citizens and private companies who set prices freely, while the state operates only the exchange layer. The concept is not a surveillance instrument, because Principle 6 removes the possibility by construction.
3. THEORETICAL FOUNDATION
Tools versus production. Our paper rests on one master distinction. Money, credit, marketplaces, taxation systems, and bureaucracies are tools of an instrumental layer; growing food, building houses, manufacturing devices, and caring for people are production, the only terminal value. A tool is justified exactly to the degree the tool serves production, and a well-designed instrumental layer is thin, cheap, and unable to mistake collecting rent for creating value. The lineage of the distinction runs from Aristotle's separation of household provisioning from wealth acquisition for wealth's own sake (Aristotle, Politics, Book I) to the classical economists' description of money as a veil. A commission of ten to thirty percent on every exchange is the exchange tool serving the exchange tool. Our framework makes the exchange tool as thin as a road.
Network effects as public goods. A marketplace is valuable because everyone is there, exactly as a language is valuable because everyone speaks the language. Economics has long recognized network externalities as the engine of platform value (Katz and Shapiro, 1985) and has long recognized public goods as goods that markets underprovide or misprice (Samuelson, 1954). Our paper joins the two recognitions: a network effect is a collective creation of all participants, and when a network effect is privately owned, the owner installs a tollbooth on a collective creation and taxes the coordination of an entire society. Roads, language, currency, and measurement standards are all publicly held network effects. Our paper argues that the national marketplace belongs on the same list. Legal scholarship reaches the same destination from the public utility tradition, diagnosing dominant platforms as the core infrastructure of the modern economy and naming the creation of public options among the principal remedies for private control of infrastructural goods (Rahman, 2018a; Rahman, 2018b). Political-economic scholarship supplies the operating model: public options, meaning reasonably priced government-provided services coexisting with private options, have a long and successful history in libraries, postal delivery, schooling, and pensions, and perform best exactly where access is fundamental, where markets malfunction through monopoly or externalities, and where government accountability is feasible (Sitaraman and Alstott, 2019). The digital marketplace passes all three tests.
4. PRIOR ART AND THE GAP
Partial precedents exist on three continents, and the precedents prove feasibility of every component while combining the components nowhere.
A government operated marketplace at national scale exists, but only for government buyers. India's Government e Marketplace, launched in 2016 and owned by a fully government-owned, non-profit special purpose vehicle, serves as the national public procurement portal. The platform has processed a cumulative gross merchandise value of approximately 18.4 trillion rupees, roughly 198 billion United States dollars, including more than 5 trillion rupees in the 2025-26 financial year alone. Micro and small enterprises fulfilled 68 percent of all orders in the same year and formed 73 percent of active sellers, an inclusion record almost no private marketplace matches. An independent World Bank assessment found average buyer savings of about 9.75 percent against median prices, and the platform's own reporting attributes roughly 8 percent savings to competitive bidding. The platform's published principles include treating all sellers fairly and offering no promotional treatment to any seller, and onboarding reaches remote sellers through more than one hundred fifty thousand post offices. A private engineering consortium maintains the platform under the stewardship of the public owner, demonstrating public ownership with contracted private construction (Ministry of Commerce and Industry, India, 2016-2026; World Bank assessment as reported). The gap: government entities are the only buyers, so citizens cannot buy on the marketplace.
A citizen-facing open commerce network exists, but as a protocol rather than as a public operator. India's Open Network for Digital Commerce, incorporated in late 2021 under the Department for Promotion of Industry and Internal Trade, was created explicitly against the concentration of electronic commerce into a small cohort of dominant platforms. The network is a set of open specifications rather than an application, connecting independent buyer applications and seller applications. Within four years the network processed more than 350 million cumulative transactions across retail, mobility, and logistics, and in the food delivery segment reduced consumer prices by roughly 15 to 20 percent through reduced platform commissions and increased competition. The network also unbundles logistics, letting any seller obtain competing delivery quotations, and pilots flow-based lending, under which merchants obtain credit against transaction history instead of physical collateral (Department for Promotion of Industry and Internal Trade, 2022-2025). The gap: private participant applications still stand between citizen and sale, still charge fees, and the state operates nothing.
Sealed-but-logged public data infrastructure exists, but carries no marketplace. Estonia's X-Road data exchange layer, in operation since 2001 and adopted in more than twenty-five countries, authenticates and logs all incoming data, and Estonia's citizen-facing data tracker has, since 2017, let every citizen review who accessed personal records and for what stated purpose (Information System Authority of Estonia). The International Monetary Fund's analysis of India's digital public infrastructure documents the macroeconomic payoff of state-built digital rails, including compliance costs for bank customer verification falling from roughly twelve dollars to six cents and expenditure savings estimated near 1.1 percent of gross domestic product (Alonso and co-authors, 2023). The gap: the infrastructure carries identity, payments, and records, but no public exchange layer for goods, services, and experiences.
The contribution of our paper is the bundle. No state has yet combined government operation, zero commission, universal citizen access, operator neutrality, honest ranking, and sealed records in one institution. Each component is proven separately; our paper assembles the components into a single doctrine and names the doctrine.
5. FOUR ARGUMENTS FOR PUBLIC OPERATION
Argument 1: Commissions are economic rent. Digital matching of a buyer with a seller costs almost nothing at the margin, while marketplace commissions average ten to thirty percent of transaction value. Network effects concentrate buyers and sellers onto a dominant platform; sellers cannot leave the dominant platform because the buyers are there; and platforms with strong network effects therefore charge commissions far above cost, which is the textbook definition of economic rent. The judiciary has reached a matching conclusion: a United States federal court found a thirty percent application store commission produced what the court called "supracompetitive" pricing and operating margins far exceeding the platform owner's investment, and thirty-six states jointly sued the other dominant application store over the same rate (United States District Court, N.D. California, 2021; State of Utah and others v. Google, 2021). Rent extraction raises consumer prices and lowers seller earnings on every transaction in the economy touched by the platform. A zero-commission public operator deletes the rent without deleting the service.
Argument 2: Commissions paid to foreign operators drain the national economy. When the marketplace operator is a foreign corporation, the commission leaves the national economy on every sale, permanently, like a pipeline exporting a percentage of national retail forever, and the exported margin is frequently booked in low-tax jurisdictions beyond the reach of domestic corporate taxation. The international response proves the diagnosis while failing as a remedy: roughly thirty countries have adopted or proposed digital services taxes of two to seven and a half percent on the local revenues of foreign platforms, precisely because physical-presence rules leave platform profits untaxed, yet empirical investigation shows dominant platforms pass digital services taxes almost entirely onto sellers through increased fees, with sellers passing the increase to consumers (Section 6 develops the failure pattern). Under a commission free public marketplace, the entire margin stays with domestic sellers, and money kept by local sellers re-spends locally with a positive employment multiplier (Moretti, 2010).
Argument 3: Automatic settlement at the moment of sale widens the formal economy. Every sale on a government operated marketplace completes on government infrastructure, so any applicable tax can be settled automatically at the moment of sale, with the seller receiving the net amount and the obligation closed. The empirical foundation is among the strongest in public economics. A randomized audit experiment covering more than forty thousand Danish taxpayers found tax evasion close to zero for income subject to third-party reporting and substantial for self-reported income (Kleven, Knudsen, Kreiner, Pedersen, and Saez, 2011). Randomized experiments across more than four hundred thousand Chilean firms found the value added tax paper trail exerts a preventive deterrence effect with enforcement spillovers up the supply chain (Pomeranz, 2015). The United States tax authority reports an annual tax gap near 458 billion dollars at a voluntary compliance rate near 82 percent, and reports that information reporting and withholding are strongly associated with higher voluntary compliance. A public marketplace makes every sale third-party-reported by construction. Meanwhile compliance costs, running near two percent of gross domestic product in the United States, near thirty percent of collected revenue on average across European studies, and between 1.2 and 1.8 percent of gross domestic product in Canadian estimates, fall away for marketplace sellers, because the transaction stream itself is the bookkeeping. The cognitive dividend compounds the financial dividend: scarcity research shows administrative burden consumes measurable mental bandwidth (Mullainathan and Shafir, 2013; Mani, Mullainathan, Shafir, and Zhao, 2013), so selling without declarations returns attention and courage to precisely the smallest sellers.
Argument 4: The alignment theorem. A private marketplace operator maximizes income equal to take rate multiplied by platform volume, and monopoly power pushes the take rate toward the monopoly optimum. A government is structurally different: government income already grows with total economic volume through taxation of the whole economy, so a government maximizes revenue and welfare together by minimizing friction on exchange. Among all possible marketplace operators, only a government therefore has a rational commission rate of exactly zero. Stated in the vocabulary of Section 3: only a public operator has no incentive to let the exchange tool mistake the exchange tool for the point. The alignment theorem converts the zero-commission principle from generosity into arithmetic.
6. WHY PRICE REGULATION FAILS AND A PUBLIC OPTION SUCCEEDS
An obvious alternative to public operation is regulating private commissions directly. The alternative has been tried, and the record teaches a structural lesson. During the pandemic, cities including San Francisco, Seattle, Washington, and New York capped food delivery commissions, typically at fifteen percent for delivery plus small allowances for other services, against prior commissions reaching thirty to forty percent; New York later made the cap permanent and licensed the industry. Platforms responded by adding new consumer-facing charges in the regulated markets, labeled regulatory response fees or city fees, recouping on the consumer side what regulation had restricted on the restaurant side, and academic evaluations found order volumes and revenues fell for independent restaurants in capped jurisdictions (Li and Wang, 2021; Sullivan, working paper). Digital services taxes repeat the pattern at the international level, with documented near-complete pass-through of the tax onto sellers and consumers.
The lesson is structural, not moral: a monopolist whose price is capped on one side of the market reroutes the extraction to the other side, because the monopoly position itself remains intact. Price regulation trims the tollbooth's rates; the tollbooth remains. A public option removes the structure instead of adjusting the price: a zero-commission public marketplace cannot be rerouted around, because the public marketplace competes for the same buyers and sellers and holds the rational rate of zero permanently. Competition from a public option also disciplines surviving private platforms far more durably than case-by-case enforcement, whose difficulty Section 7 documents.
7. OPERATOR NEUTRALITY AND HONEST RANKING
The owner-merchant conflict. Dominant private platforms notoriously operate in a dual mode, running the marketplace while selling own products on the marketplace. Economic theory shows the dual mode creates a steering conflict: a leading model finds the hybrid mode yields higher platform fees for third-party sellers, higher final prices, and less variety, lowering consumer welfare relative to a pure marketplace, through a mechanism of insidious steering in which raising commissions on rivals steers demand toward the platform's own products (Anderson and Bedre-Defolie, 2024). A complementary model shows outright bans on the dual mode can harm welfare, while targeted prevention of imitation and self-preferencing performs better (Hagiu, Teh, and Wright, 2022); surveys of the literature find the trade-offs complex and resistant to blunt prohibition (Etro, 2024; Kittaka, Sato, and Zennyo, 2023). Regulators now attempt the targeted route: the European Union's Digital Markets Act forbids designated gatekeepers from ranking own services more favourably and from using non-public business-user data against the same business users, yet implementation analyses describe detection and monitoring of self-preferencing as complex, resource-intensive, and case-by-case. Our framework resolves the conflict structurally rather than forensically: under Principle 4 the public operator sells nothing, so no self-preferencing incentive exists, no algorithmic audits are needed, and the welfare-superior pure marketplace of the theory literature is instituted by constitution rather than approximated by enforcement. Notably, our framework bans nothing for private actors: private hybrid platforms remain legal, and the public option merely out-competes rent.
Honest ranking. On advertising-funded platforms, ranking follows payment, so citizens see the most promoted products rather than the best products, and markets that reward marketing budgets over quality degrade quality, in the classic logic of markets for lemons (Akerlof, 1970). Review fraud deepens the distortion: peer-reviewed analysis found roughly sixteen percent of reviews on a major review platform filtered as suspicious, with fraud incentives strongest for weak reputations (Luca and Zervas, 2016), and field-experimental work documents manipulation shaped by platform verification design (Mayzlin, Dover, and Chevalier, 2014). Regulators again mirror the concern: a United States trade regulation rule effective October 2024 prohibits fake reviews and purchased review sentiment, with civil penalties per violation and first enforcement sweeps already issued, while the regulator warns that generative artificial intelligence makes fake reviews cheap at scale. A public marketplace holds a structural advantage no private platform can copy: every purchase ties to a real, payment-verified identity on public payment infrastructure, so reviews can be restricted to verified buyers and weighted by verified purchase, making fabrication expensive by construction. Honest signals let quality producers win, and citizens systematically reach better products through real feedback instead of promoted products.
8. FIVE GROWTH CHANNELS: ANTICIPATED FINDINGS
Our paper derives five channels through which the framework contributes to economic growth. Each channel is stated with the causal mechanism and, in Section 12, with the measurement that would falsify the channel.
Channel 1 : The price channel. Zero commission removes ten to thirty percent from the wedge between what buyers pay and what sellers receive; smaller wedges lower final prices, raise seller earnings, or both; lower prices raise transaction volumes. The open-network precedent already displays the direction of the effect, with food delivery prices roughly fifteen to twenty percent lower under reduced commissions. The experiences segment extends the channel to tourism: zero commission on accommodation stays and tours lowers visitor prices while local hosts keep the full amount, improving national tourism competitiveness and increasing foreign income.
Channel 2 : The participation channel. Barriers of commissions, registration hurdles, invoicing duties, and tax anxiety each remove a share of potential sellers; automatic settlement removes every barrier at once, so pensioners, students, and village workshops can sell with zero paperwork. Precedent shows public marketplaces disproportionately activate the smallest sellers, with micro and small enterprises fulfilling 68 percent of orders on India's public procurement marketplace, and physical onboarding through postal networks reaches citizens far from digital life.
Channel 3 : The formalization channel. When formality costs nothing, informal sales migrate voluntarily onto the public marketplace; the tax base widens at unchanged rates, following the third-party-reporting results of Kleven and co-authors and Pomeranz; and every small seller accumulates a verifiable transaction history, which unlocks credit through flow-based lending of the kind already piloted on the Indian open network. The formalization channel connects our paper to companion work on small credits and small banking for citizens.
Channel 4 : The quality channel. Honest ranking under Principle 5 shifts competition from advertising budgets to product quality; quality producers win; sellers redirect advertising spending toward product improvement, since advertising among substitutable products is partly a zero-sum arms race; and industry quality rises.
Channel 5 : The circularity channel. Reselling a used good today requires paying a commission and enduring fixed fees whose percentage burden explodes at low values, with platform fee structures making a five-euro sale cost several times the percentage of a hundred-euro sale, and with platform operators themselves reporting negative unit economics on cheap items; the practical consequence is amputation of the low-value long tail of the secondary market, so cheap used goods are discarded rather than resold. The flagship empirical study of secondary markets shows transaction costs strongly suppress trade volumes and that the welfare losses concentrate on lower-valuation households (Gavazza, Lizzeri, and Roketskiy, 2014). Zero commission makes listing an eight-euro item rational for the first time; listings thicken; buyers follow; goods live longer; waste declines; imports of new goods fall; and poorer citizens gain access to cheaper goods. The market context is already large and growing, with 93 percent of surveyed Americans buying secondhand within a year, a national recommerce market projected above three hundred billion dollars by 2030, most buyers motivated by saving money, and a majority of sellers using proceeds for bills. Extended product life is a positive externality that a commission-charging operator can never monetize, so public provision answers a textbook market failure. The services segment closes the loop by carrying repair services, joining repair, spare parts, and resale into one circular triangle, in synergy with companion work on product standardization and repairability.
9. NATIONAL SECURITY AND THE FISCAL SECULARITY BOUNDARY
Every purchase reveals something: a home address, an income level, a daily routine, a health hint, a family composition. A dominant foreign marketplace aggregates purchase histories, delivery addresses, travel patterns, and consumption habits for a large share of a population, and the aggregate describes national supply dependencies, economic vulnerabilities, and the private lives of officials, soldiers, and judges. The records sit under foreign jurisdiction, where foreign legal process and foreign political pressure can reach the records regardless of domestic law. A government operated marketplace keeps the same records inside national jurisdiction and inside national law.
Repatriating the records must never create a domestic surveillance instrument, and our framework treats the danger as constitutive rather than incidental. Under the companion doctrine of Fiscal Secularity, the constitutional and technical separation of money, taxation, and governance , marketplace records obey three simultaneous properties. The records are immutable, so no authority can edit history. The records are sealed by default, readable by no official without legal cause. The records are conditionally accessible only through a judicial gate limited to serious crimes of theft of funds and fraud, and every access is logged, with the log entry permanently visible to the affected citizen, so watching the watcher becomes a citizen right rather than a promise. Evidence obtained outside the judicial gate is inadmissible. Working precedent exists: Estonia's data exchange layer authenticates and logs all data access, and Estonia's citizen data tracker has shown citizens who accessed personal records, and why, since 2017. The governing sentence of the bundle: a public marketplace without sealed records would merely swap a foreign watcher for a domestic watcher, while a public marketplace with sealed records removes both. A functioning democracy requires that citizens do not fear the money and purchase trails of daily life, and the marketplace inherits the requirement in full.
10. SYSTEM ARCHITECTURE AND GOVERNANCE
Components. The marketplace stack contains seven components, each with working precedent. First, identity: seller and buyer identity binds to the national digital identity used by the payment infrastructure. Second, payments: settlement runs on central-bank payment infrastructure, with taxes settled at the moment of sale and machine-generated receipts attached to every payment. Third, catalog and search: open, standardized product cataloging, with ranking governed by Principle 5. Fourth, logistics: the marketplace owns no delivery fleet; competing private logistics providers quote for every shipment, following the unbundled-logistics precedent, so delivery prices stay competitive. Fifth, reviews: verified-purchase-only reviews, weighted and fraud-screened, under the payment-identity advantage of Section 7. Sixth, disputes: algorithmic-first resolution, with automatic refund and tax clawback when buyer and seller consent, duplicate detection handled without humans, and human arbitration only on appeal, preventing the dispute system from growing into a new bureaucracy; non-consensual harms of theft and fraud route to courts, whose remedies take the form of compensating transactions rather than administrative edits of the ledger. Seventh, statistics: anonymized aggregate market data publishes openly and equally to all sellers, converting the informational hoard of private platforms into a public good and giving national statistics real-time price measurement.
Governance. Four safeguards discipline the operator. First, constitutional entrenchment: zero commission, equal access, operator neutrality, and sealed records are entrenched and deliberately difficult to amend, because historical exceptions expand. Second, published metrics: uptime, cost per transaction, dispute resolution times, and ranking-integrity audits publish quarterly, because the correct performance standards for infrastructure are the standards of roads, namely availability and cost, not profit. Third, contracted engineering with public ownership, following the procurement-marketplace precedent, so state ownership never means state-only construction. Fourth, competitive discipline: private platforms remain legal, so citizens hold an exit option, and the exit option keeps the public operator honest.
11. OBJECTIONS AND ANSWERS
Objection 1: governments cannot build good software. The objection fails empirically at national scale: a fully state-owned marketplace has processed roughly 198 billion dollars cumulatively with documented savings; a state-initiated open network reached hundreds of millions of transactions within four years; and state payment and identity rails in the same country carry the large majority of national payment volume with interoperability praised by the International Monetary Fund. Public ownership with contracted private engineering, under published metrics, is the operating model, and the model already runs.
Objection 2: a zero-commission public operator competes unfairly with private platforms. Roads also compete unfairly with private toll roads, and society calls the outcome infrastructure. The framework bans nothing, expropriates nothing, and merely declines to charge rent on the exchange layer; private platforms may compete on superior service, curation, or specialization. Compatibility with state-aid and international trade rules differs by jurisdiction and is named an open legal parameter in Section 12 rather than assumed away.
Objection 3: without profit motive, the public operator will stagnate. The exchange function is thin, like a road; the correct metrics are availability and cost; surviving private platforms supply competitive discipline; and the governance regime of Section 10 publishes performance quarterly. Where innovation matters most, in logistics and in seller-side services, the framework deliberately leaves provision to competing private firms.
Objection 4: a state marketplace enables state control over commerce and speech. The objection is the most serious, and the objection is exactly why our paper bundles the marketplace with Fiscal Secularity and entrenches equal access constitutionally. The state operates the square; the state does not choose the merchants, cannot browse the stalls without a judge, and leaves a permanent, citizen-visible fingerprint whenever a judge permits a look. A design under which weaponization is simultaneously illegal and technically expensive protects citizens better than any private platform's terms of service ever has.
Objection 5: measured growth will be mere migration from private platforms. Partly true, and Section 12 therefore separates transfers from creation: migrated volume is a transfer, while genuine growth appears only through the five channels, each independently measurable.
12. RESEARCH DESIGN, OPEN PARAMETERS, AND EVALUATION PROCEDURE
Our paper is a position and design paper, and the research design follows three methods. First, design science: Sections 2 and 10 specify an artifact precisely enough to build. Second, causal mechanism mapping: Sections 5 through 9 state every claimed benefit as an explicit causal chain from design property to measurable outcome, each chain anchored in peer-reviewed literature or documented precedent. Third, comparative precedent analysis: Section 4 extracts feasibility evidence and design lessons from the procurement marketplace, the open commerce network, and the sealed-records infrastructure.
The evaluation procedure is a staged national pilot. Stage one runs the marketplace in one region and two verticals, one goods vertical and one services vertical, chosen for measurable baselines. Stage two adds the used-goods segment and the experiences segment. Stage three scales nationally. Measurement at every stage separates transfers from creation using seller-level histories.
Named open parameters, with the observable that resolves each parameter: first, seller savings, measured as the effective take-rate difference retained by sellers, with the anticipated finding of near-full retention of the former commission; second, price effects, measured against matched offline and private-platform baselines, with the anticipated finding of consumer price declines in high-commission verticals, following the fifteen to twenty percent food delivery precedent; third, participation, measured as first-time sellers per thousand adults, with the anticipated finding of disproportionate entry by the smallest sellers; fourth, formalization, measured as previously unreported activity appearing in third-party-reported form at unchanged rates, following the third-party-reporting literature; fifth, secondary market volume, measured as listings and completed sales below a low-value threshold, with the anticipated finding of long-tail revival; sixth, quality dynamics, measured through verified-review distributions and return rates; seventh, operating cost per transaction, benchmarked against infrastructure standards; eighth, the legal parameter, namely state-aid and trade-rule compatibility across jurisdictions. Each anticipated finding is falsifiable: flat volumes, absent formalization, or a dead long tail would each disconfirm the corresponding channel.
13. LIMITATIONS
Our paper acknowledges five limitations honestly. First, migration versus creation: a fraction of observed activity will be transfer from private platforms, and only the staged measurement design separates the fraction. Second, state capacity varies: the precedents come from states with strong digital infrastructure traditions, and the framework presupposes, or must first build, national digital identity and public payment rails. Third, legal compatibility with state-aid and trade regimes remains an open parameter, not a settled conclusion. Fourth, capture risk: a future government may attempt to bend ranking, access, or records; the constitutional entrenchment and citizen-visible access logs are designed against the risk, and the design is a bet on institutions, stated as a bet. Fifth, the balance literature counsels humility: careful models show blunt interventions against private platforms can harm welfare, which is precisely why the framework intervenes by adding a neutral public option rather than by banning private modes.
14. IMPLICATIONS AND DESIGN RECOMMENDATIONS
For policy, our paper recommends that governments classify digital marketplaces as public infrastructure, in the same budgetary and constitutional category as roads and postal services, and build under the six design principles: public operation, zero commission, equal access, operator neutrality, honest ranking, and sealed records. For sequencing, our paper recommends payments and identity first, the goods marketplace second, services and experiences third, and the used-goods long tail as the deliberate early showcase, because the circularity channel delivers visible citizen benefit fastest and threatens incumbents least. For the wider research program, the marketplace is one application of one axiom, the instrumental layer of an economy exists to serve production and should be as thin as possible, and the marketplace paper therefore stands beside companion work on automated transaction taxation, on Fiscal Secularity, on small banking, and on universal capital endowments as parts of a single structural argument. For scholarship, the alignment theorem of Section 5 and the network-effects-as-public-goods claim of Section 3 invite formalization and testing beyond the pilot program described above.
15. Conclusion
The market square was public for most of recorded history, and the privatization of the digital market square is an accident of sequence, not a law of nature: private firms simply built first on new terrain. Our paper has argued that the terrain is infrastructure; that commissions of ten to thirty percent are rent on a collective creation; that only a government can rationally operate the exchange layer at the true price of zero; that automatic settlement turns the marketplace into the simplest tax system ever operated, following the strongest results in empirical public economics; that honest ranking and payment-verified reviews repair the information channel on which product quality depends; that zero commission revives the amputated long tail of used goods, cutting waste and helping poorer citizens most; and that sealed, judicially gated, citizen-visible records keep the whole construction loyal to the citizens who own the square. Every component runs somewhere today. The contribution of our paper is the assembled doctrine, the arithmetic of alignment, and the falsifiable program by which any government can test the claim. The town square belongs to the town. Our paper has described how to build the digital one.