Abstract:

Internet platforms have formed an evolutionary path of “Big Data Affinity” and relying on it to seek success. The path implies a three-stage method which includes cash-burning for clout， cultivating habits and access to revenue. It brings a key concern on how to break the path dependence and promoting anti-monopoly governance. In this paper， the Salop circular model is introduced to deduce the market competition of platforms in the three-stage evolutionary path. And the impact of price sensitivity factors and user transfer costs on the market share and profits of platforms is analyzed. 1） The results show that it helps platforms to gain a big market share by spending plenty of money， in particular， when the price sensitivity of customers is high. 2） The profit of the platform might decline significantly， while the competition for users puts all platforms in the market under pressure. 3） The more the number of platforms in the market， the more their market share and profits are affected by the cost of transferring users， and the less conducive they are to take the monopoly advantage and implement “Big Data Affinity”. Accordingly， it is proposed that a price monitoring platform should be set up and customers are provided with more market information and options of transferring. More investment and support should be put to latecomer platforms in order to break the path dependency.

Key words: platform economy, antitrust, path-dependence, salop model