Description:
The platform literature in economics and management claims that platform owners should design and enforce ecosystem governance to satisfy all platform sides, that this governance should be precisely defined, and that sustained governance infringement is bound to lead to platform failure. Yet, despite anecdotal evidence to the contrary, there has yet been scant empirical research exploring the extent to which platform owners may be deliberately engaging in practices that are systemically inconsistent with their own declared governance rules and whether the platform may actually benefit from these discrepancies. This article asks: Are there sustained discrepancies between a platform owner’s declared ecosystem governance and its actual practices? And what are the consequences of these discrepancies on the platform owner and its ecosystem members? To answer this question, we studied how Amazon governed its Marketplace between 2019 and 2022 and found evidence of what we name “two-faced” platform governance. It is composed, on the one hand, of the platform firm’s officially declared set of rules, roles, and activities and, on the other hand, of a set of practices and “unwritten rules” of participation which depart from the official governance. We argue that this two-faced platform governance creates unpredictability for complementors and enhances, at least in the short term, the platform firm’s bargaining power over them. We also identify a set of adaptive practices that ecosystem participants adopt and find that they, too, resort to sets of declared and undeclared practices. We present a process model characterizing the declared and undeclared practices and how they interact. We discuss our contributions to the literature and implications for managers and regulators