Özalp co-authored the study with Joey van Angeren (Vrije Universiteit Amsterdam) and Milan Miric (University of Southern California).

The paper dives into the complex world of platform ecosystems—think of tech platforms like gaming consoles and mobile smartphones with their operating systems and app stores —and explains how control points within these systems, known as strategic bottlenecks, change over time. This process influences mergers and acquisitions (M&As), shaping both competitive behavior and regulatory implications.

What are strategic bottlenecks?

Strategic bottlenecks are the parts of a platform ecosystem where power is concentrated—places where companies controlling such bottlenecks can also control how value is created and captured. These control points can shift, for example due to new technology or changing relationships between ecosystem players.

The researchers analysed more than 30 years of developments in the console video game industry (1990–2023) to see how these shifts in control points affect corporate strategy and competition. One key finding is that various types of companies in the ecosystem don’t just use acquisitions to protect their current position, but also to move into new strategic bottlenecks as the ecosystem changes.

Key insights from the study

• Control points move: Strategic bottlenecks are not fixed. Companies need to stay flexible and may need to shift focus or buy up other firms to adapt.
• It’s not just about platforms: Platform ecosystems exhibit multilateral dependencies, emphasizing the importance of analyzing beyond bilateral relationships to capture ecosystem-wide dynamics, particularly when assessing competitive and regulatory implications.
• Acquisitions as a strategy: Companies use M&As not only to protect their turf but also to prepare for future changes in the ecosystem.

Why this matters for regulators and businesses

The research highlights several important implications for the regulation of platform ecosystems:

• Looking beyond the platform owners: Powerful non-platform actors can also impact the ecosystem significantly, highlighting the potential need of regulatory oversight also for such actors.
• Thinking in terms of the whole ecosystem: Rules and oversight should consider the entire ecosystems, including the interactions among companies within the ecosystem.
• Stay flexible: Because bottlenecks shift over time, regulations should be able to adapt to new sources of power and risk.

This study offers new insights for anyone working with digital platforms, ranging from business strategists to policymakers trying to keep fast-changing markets fair and open.

More details can be found in the online publication: Platform Ecosystems, Bottlenecks, and M&A Activity: Implications for Platform Regulation.