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Upward Pricing Pressure from Digital Platforms’ Imposition of Take Rates on App Developers

BY | February 27, 2023

The vertical relationship between digital platforms and the app developers that ply their wares on such marketplaces (e.g. App Store, Play Store, Oculus Store) imposes a largely ignored upward pricing…

The vertical relationship between digital platforms and the app developers that ply their wares on such marketplaces (e.g. App Store, Play Store, Oculus Store) imposes a largely ignored upward pricing pressure on prices. Digital platforms aim to create walled gardens, leveraging lock-in to cabin consumer substitution within the platform’s boundaries. Digital marketplace owners are largely agnostic to intra-platform substitution, because they collect a platform fee, or “take rate” regardles

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