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Self‐Preferencing in Markets with Vertically Integrated Gatekeeper Platforms

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  • Jorge Padilla
  • Joe Perkins
  • Salvatore Piccolo

Abstract

The competitive strategies of ‘gatekeeper’ platforms are subject to enhanced scrutiny. For instance, Apple and Google are being accused of charging excessive access fees to app providers and privileging their own apps. Some have argued that such allegations make no economic sense when the platform's business model is to sell devices. In this paper, we build a model in which a gatekeeper device‐seller facing potentially saturated demand for its device has the incentive and the ability to exclude from the market third‐party suppliers of a service that consumers buy via its devices. Foreclosure is more likely if demand growth for the platform's devices is slow or negative, and can harm consumers if the device‐seller's services are inferior to those offered by the third parties.

Suggested Citation

  • Jorge Padilla & Joe Perkins & Salvatore Piccolo, 2022. "Self‐Preferencing in Markets with Vertically Integrated Gatekeeper Platforms," Journal of Industrial Economics, Wiley Blackwell, vol. 70(2), pages 371-395, June.
    • Handle: RePEc:bla:jindec:v:70:y:2022:i:2:p:371-395
    DOI: 10.1111/joie.12287
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    Cited by:

    1. Etro, Federico, 2023. "Platform competition with free entry of sellers," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    2. Christian Rusche & Jeanne Mouton, 2024. "The anti-steering provision of Article 5 (4) of the DMA: a law and economics assessment on the business model of gatekeepers and business users," European Journal of Law and Economics, Springer, vol. 57(1), pages 207-237, April.
    3. Steffen, Nico & Wiewiorra, Lukas, 2022. "Device Neutrality: Softwaremarktplätze und mobile Betriebssysteme," WIK Discussion Papers 487, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    4. Federico Etro, 2024. "e‐Commerce platforms and self‐preferencing," Journal of Economic Surveys, Wiley Blackwell, vol. 38(4), pages 1516-1543, September.
    5. Steffen, Nico & Kroon, Peter & Abbasi, Faisal Aman & Wiewiorra, Lukas, 2023. "Access charges in software-based termination monopolies," WIK Discussion Papers 514, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    6. Amelia Fletcher & Peter L Ormosi & Rahul Savani, 2023. "Recommender Systems and Supplier Competition on Platforms," Journal of Competition Law and Economics, Oxford University Press, vol. 19(3), pages 397-426.
    7. Bisceglia, Michele & Padilla, Jorge & Piccolo, Salvatore & Shekhar, Shiva, 2022. "Vertical integration, innovation and foreclosure with competing ecosystems," Information Economics and Policy, Elsevier, vol. 60(C).

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