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The Control of Porting in Platform Markets

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  • Pollock, Rufus

Abstract

In platform markets, economies of scale combined with complementarities between a platform and its associated software or services can generate lock-in because of indirect network effects (positive feedback between the number of consumers using that platform and the utility of an individual consumer). In such circumstances, the control of porting – porting being the conversion of software or services developed for one platform to run on another – may be central to the development and maintenance of a dominant position. Focusing on the case where a dominant proprietary platform exists, we show that the ability to control porting has significant implications for pricing, market power and welfare. As such, a proper understanding of porting will be crucial to antitrust analysis of platform markets (increasingly frequent in our digital world). This is illustrated by the centrality of porting issues to several well-known recent cases including that of Microsoft in relation to its browser and its media player, Apple in relation to its DRM and iTunes, and Ebay in relation to its use of the cyber-trespass doctrine to prevent competitor's access to its site.

Suggested Citation

  • Pollock, Rufus, 2009. "The Control of Porting in Platform Markets," The Journal of Economic Asymmetries, Elsevier, vol. 6(2), pages 155-180.
    • Handle: RePEc:eee:joecas:v:6:y:2009:i:2:p:155-180
    DOI: 10.1016/j.jeca.2009.02.011
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    References listed on IDEAS

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    1. Kevin M. Murphy & Steven J. Davis, 2000. "A Competitive Perspective on Internet Explorer," American Economic Review, American Economic Association, vol. 90(2), pages 184-187, May.
    2. Luís Cabral, 2011. "Dynamic Price Competition with Network Effects," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(1), pages 83-111.
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    6. Michael D. Whinston, 2001. "Exclusivity and Tying in U.S. v. Microsoft: What We Know, and Don't Know," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 63-80, Spring.
    7. Benjamin Klein, 2001. "The Microsoft Case: What Can a Dominant Firm Do to Defend Its Market Position?," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 45-62, Spring.
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    Cited by:

    1. Michael Wohlfarth, 2019. "Data Portability on the Internet," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 61(5), pages 551-574, October.
    2. Wohlfarth, Michael, 2017. "Data Portability on the Internet: An Economic Analysis," 28th European Regional ITS Conference, Passau 2017 169506, International Telecommunications Society (ITS).

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    More about this item

    Keywords

    L15; L12; L13; Network Effects; Two-sided markets; Porting; Antitrust; Competition;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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