LAW & ECONOMICS: DIGITAL ECOSYSTEMS - COMPETITION ENFORCEMENT - RESTRICTIONS - RISKS - EFFICIENCY - INCENTIVES TO INNOVATE

Incentives to innovate in “product ecosystems”

Restrictive practices by digital ecosystems have become an area of significant concern for competition enforcement theory and practice. Two such practices have received particular attention: restrictions to openness and restrictions to interoperability. This article explores the role of these restrictions in ’product ecosystems’, i.e. ecosystems monetised on the basis of a core product or service. In this class of ecosystems, these two practices have parallels with vertical restraints and with tying practices, respectively. By exploring these parallels, this article finds both anti-competitive risk and the potential for positive effects on efficiency and on incentives to innovate.

Les pratiques restrictives émanant des écosystèmes numériques sont devenues un sujet de préoccupation important pour la théorie et la pratique du droit de la concurrence. Deux de ces pratiques ont fait l’objet d’une attention particulière : les restrictions à l’ouverture et les restrictions à l’interopérabilité. Cet article explore le rôle de ces restrictions dans les ’écosystèmes de produits’, c’est-à-dire les écosystèmes monétisés sur la base d’un produit ou d’un service. Dans cette catégorie d’écosystèmes, ces deux pratiques ont respectivement des parallèles avec les restrictions verticales et les pratiques de vente liée. En explorant ces parallèles, cet article trouve à la fois un risque anticoncurrentiel et le potentiel d’effets positifs sur l’efficacité et sur les incitations à innover.

I. Introduction 1. In the last few years, economic research has greatly improved our understanding of the motivations and effects of strategies and business models adopted by digital ecosystems. A large proportion of this research has identified several mechanisms that give rise to a risk of anti-competitive outcomes. 2. This note focuses on two particularly challenged practices: restrictions to openness and restrictions to interoperability. It studies their effects in the context of a particular type of ecosystem—product ecosystems—investigating effects on investment incentives in addition to competition effects. 3. “Product ecosystems” are ecosystems [1] with a product or service at their core, the value of which is enhanced by user-managed combinations with ancillary or

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  • London Economics

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Paula Ramada, Incentives to innovate in “product ecosystems” , May 2021, Concurrences N° 2-2021, Art. N° 100689, pp. 34-43

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