Abstract

Digital platforms are increasingly shifting from permissive market facilitation toward proactive and algorithmically mediated governance. While stricter quality-control policies may improve consumer protection and reduce information asymmetry, their supply-side consequences remain underexamined. This study investigates Amazon’s December 2025 dietary supplement quality mandate as a natural experiment to examine how platform-level compliance requirements affect seller survival, sales performance, price adjustment, and listing visibility. We conceptualize these pressures as compliance squeeze, whereby uniform quality mandates impose unequal operational, administrative, and financial burdens on sellers with different compliance capacities. Using planned ASIN-week panel data from SellerSprite, the study proposes a two-stage empirical strategy. A Regression Discontinuity Design will capture immediate operational disruptions around the policy threshold, while a Two-Way Fixed Effects Difference-in-Differences model will estimate longer-term structural effects across treated and comparison listings. By retaining inactive ASINs rather than excluding them from the sample, the study addresses survivor bias and captures less visible forms of market exit, including sales collapse, Buy Box loss, and listing inactivity. The expected contribution is to extend platform governance research beyond consumer-side trust and quality assurance by highlighting how algorithmic regulation may reshape seller participation and marketplace diversity.

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