Digital platforms are increasingly criticized for being disembedded, raising ethical concerns about their minimal links with the economic, political, and cultural environments in which they operate. Many ‘local digital platforms’ argue that their connection with and responsibility to their territory sets them apart from traditional digital platforms. However, more research is needed to better understand how local platforms claim different forms of territorial embeddedness to address the ethical challenges of the platform economy. In this article, we analyze these claims and (...) abductively develop a typology of digital platforms’ links to their local environments based on eleven sub-dimensions, drawing on the concept of territorial embeddedness. According to our framework, territorial embeddedness is multifaceted, and platforms can be characterized by a continuum from weak to strong embeddedness. This renewed conceptualization offers a deeper understanding of local platforms’ territorial embeddedness. In addition, our framework allows for a critical examination of how local platforms respond to ethical challenges of the platform economy. Our research thus brings a fresh perspective to the polarized debate between platform capitalism and cooperativism. (shrink)