White Paper April 19, 2021 What Drives and Defines Digital Platform Power? A framework, with an illustration of App dynamics in the Apple Ecosystem Michael G Jacobides, London Business School (& Evolution Ltd) Pg Contents 3 Executive Summary 5 1. What Shapes and Defines Platform Dominance 11 2. A Simple Framework to Define Platform Power 14 3. Applying the Framework: Lessons from Practice 30 4. From Platform Dominance to Anticompetitive Effects: Assessing a Platform’s Exclusionary Conduct, With an Application to the Apple-Tinder Relationship 43 5. Concluding Thoughts 46 References 54 Appendix: How often do Consumers Switch Away from iPhones? Michael G Jacobides (
[email protected]) is the Sir Donald Gordon Professor of Entrepreneurship and Innovation and Professor of Strategy at the London Business School. He is Lead Advisor of Evolution Ltd, Academic Advisor at the Boston Consulting Group and the Chief Expert Advisor on the Digital Economy at the Hellenic Competition Commission. He has advised both regulatory authorities and corporates on digital strategy and competition. For this paper, he would like to acknowledge receiving relevant data and support in his analysis from Match Group. The views expressed in this paper are, however, solely those of the author. They also do not represent the views of the Hellenic Competition Commission. 2 Executive Summary The seemingly inexorable growth of the leading platform businesses coupled with the growing wave of complaints about platform businesses’ anti-competitive behavior has drawn attention to the conditions and strategies that give rise to dominance in digital marketplaces. A platform can impose itself as a necessary trading partner, and become a gatekeeper between its consumers and sellers, when these participants do not have alternative channels in which to transact and cannot viably opt-out altogether.