Incompatible competition leads to market lock-in and stifles innovation.
Switching costs and network effects can lock customers into using certain products, making it hard for them to switch to better options. This gives companies power over customers and makes it difficult for new companies to enter the market. Companies compete by offering deals and lowering prices to attract customers. Incompatible competition can be more profitable for companies, even if it is less efficient. This means that companies may choose to make products that are not compatible with others too often. It is suggested that policies promoting compatibility between products would be beneficial.