Gatekeepers and Kingmakers: Do Superplatforms Distort Digital Competition?

Abstract

The rising dominance of superplatforms raises concerns about conflicts of interest and externalities on innovation, as they act as both marketplace gatekeepers and strategic investors. Studying Google’s dual role via Google Ventures (GV) and the Android marketplace, we find Google backed startups receive 115% more reviews, 12% higher ratings, and 77% fewer bug complaints than their iOS counterparts—despite no major app updates. These gains stem from selective review removal and platform promotion. Using a difference-in-differences approach with iOS versions as controls, we isolate treatment from selection effects. Our findings challenge platform neutrality and highlight subtle mechanisms of competitive distortion.

Keywords: Market Concentration, Superplatforms, Platform Neutrality, Innovation Externalities, Conflicts of Interest

JEL Classification: D42, D83, G24, O32