Platform-run marketplaces may exploit third-party sellers’ data to develop competing products but the threat of future competition can deter sellers’ entry. We explore
how this trade-off affects the platform’s entry on the marketplace and the referral fee
it charges to the third-party sellers. We first characterize the platform’s optimal fee
under different degrees of commitment on its own entry policy. We show that full commitment maximizes not only the platform’s payoff but also consumer surplus, as the
associated fee induces maximal entry by the sellers. Next, we show how and when the
platform’s policy on information sharing between its marketplace and product divisions
can substitute for its commitment to entry. We characterize the platform’s optimal
information policy and examine how it interacts with the platform’s fee structure. We
show that outright ban on information sharing between the platform’s divisions can
reduce consumer welfare as it may lead to a higher referral fee that thwarts sellers’ entry. Our findings highlight the importance of considering the platform’s fee structure
as a strategic response in the policy debates on marketplace regulation.