Tuesday 20 February 2018

Could similar platforms compete with each other?

 There are many platforms, especially in the digital world. In the digital world, similar platforms provide almost homogenous products. For example, GooglePlay and App Store are two smartphone application stores providing people with smartphone applications, and the smartphone applications are almost identical, the majority of the applications you can find on App Store are also available on GooglePlay. Because the numbers of similar platforms are relatively small, it is really easy for these platforms to collude with each other.

The power between customers and platforms is imbalanced, since customers cannot find anywhere to get what they want without these platforms. Of course, this would make some people think about entering the market; but newly established platforms are not able to compete with the existing players in the sector because they have different amounts of resources. However, the power between platforms and actual product suppliers is not as imbalanced as the power between customers and platforms. Without the support of suppliers, platforms themselves cannot survive. The problem of the suppliers' side is there are so many suppliers that it is almost impossible to let them agree on the same issue.

However, there is one occasion that platforms may start to compete. When the suppliers are unable to supply products to all platforms due to technological limitations and (or) other types of limitations. The platforms attract their users by providing the products they want; however, if the suppliers are unable to supply to all platforms, the platforms have to attract good quality suppliers, this will lead to competitions between platforms.

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