When I was at eBay (back in the day) we decided to open up our API to allow outside developers access to the eBay system. We wrote documentation, we went on road tours to show the world what is possible with our API, we worked with and helped developers to build their ideas on top of the API. Within months we created a thriving, growing, innovative ecosystem of individual developers & companies who created tools which fulfilled a huge need - tools to allow larger eBay sellers stay on top of their sales, inventory, accounting and their customer relationships. Within a short two years this ecosystem grew so fast that a significant amount of eBay items were listed using these 3rd party tools. Then eBay decided to compete. eBay built their own tools - albeit not very good ones, but eBay had the advantage of controlling the access to the customer (which happens to be the same customer our API partners sold their products to - eBay sellers). After a while eBay decided to lower the price of their tools to essentially zero - because they could (eBay made their money by the listing fees, not from selling tools). What happened then was that the market for lower-end seller tools dried up - nobody could effectively compete with eBay. eBay could push their products to their customers - both from a marketing as well as pricing perspective. The result was that innovation in this space effectively disappeared - the tool vendors either went upmarket (i.e. they produced tools which had more functionality and were more expensive) or simply disappeared. eBay sellers were either forced to live with the rather mediocre eBay tools (which they got for free - hooray!) or had to spend significantly more to use the high-end tools. All in all pretty much nobody won.