This study offers a novel account of how platforms can orchestrate complementor business models through governance choices. In a platform setting, the platform owner can often govern how third-party firms participate by shaping the rules and architecture. Business models jointly consider value creation activities and value capture methods, and thus, are a critical strategic choice that affect the value proposition of a platform and its complements. Thus, a key tension in platform governance design is to encourage complementor value creation for the platform ecosystem, while finding ways to capture a share of that value. Through a large-scale quantitative study of 15,604 mobile applications between January 2021-July 2021 supplemented with a program of qualitative interviews, I investigate how changes to Apple App Store policies around complementor business models affected platform participants. I leverage the announcement of a platform change that negatively impacted in-app advertising to show that firms that had relied on advertising were more likely to exit from the platform and shifted their innovation efforts. I also provide preliminary evidence that while this change negatively affected the amount of value capture that the platform owner received from affected third-parties, it also led to increased first-party value capture. These findings enrich our understanding of how platform owners balance between value creation and value capture in an ecosystem.
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