The Control of Porting in Platform Markets

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.