APP STORE: MARKET BOUNDARIES AND APPLE’S MARKET POWER
The article is based on the research in mobile applications markets. The distribution of market power in these markets depends on the ability of a digital ecosystem’s owner to control the handling of mobile applications inside the ecosystem. The degree of this control is determined by the substitutability of different application stores as necessary facilities for the access to mobile applications. The authors provide the survey-based empirical estimates of such substitutability for Apple’s mobile application store - App Store. The results of further tests for market boundaries delineation confirm the embeddedness of final users in Apple’s ecosystem in absence of feasible opportunities to change the operating system and, consequently, the application store. The findings explain the degree of Apple’s market power and provide grounds for antitrust intervention.