iPhone fans share a light moment while waiting for the first day sales of iPhone 3GS in Tokyo, Japan, on June 26, 2009.Junji Kurokawa/The Associated Press
Kean Birch is director of the Institute for Technoscience & Society and the Ontario Research Chair in Science Policy at York University.
I’ve just written a book about Big Tech’s “data enclaves,” the basic premise being that these large digital tech firms have created their own ecosystems – sitting within wider competitive markets – in which they control the rules of the game, transactional dynamics, and most importantly the very market information on which everyone relies to operate in an economy. They have become, in effect, a market to themselves.
Shameless plug aside, the point of mentioning these enclaves is that a new form of them is threatening to emerge.
According to the U.S. consulting firm Gartner, a super-app is an application that “can consolidate and replace multiple apps for customer or employee use and support a composable business ecosystem.” Instead of having to download and use a range of different apps, the super-app offers users a single convenient meta-platform through which they can access a range of useful services, such as payments, messaging, shopping, and more.
China’s WeChat represents an example of these super-apps, offering it users a range of services including ride-hailing, food delivery, messaging, and money transfers. But in the West such apps have yet to meaningfully catch on.
Elon Musk’s purchase of Twitter and its relaunch as X represents a far less successful example of a super-app. Mr. Musk seems to want Twitter/X to become an “everything app,” which we would use to make payments, stream videos, message or call each other, read and watch news, and so on. Time will tell whether Mr. Musk’s ambitions will be fulfilled or not.
Such super-apps are gaining ground amid concerted efforts over the past few years to break up Big Tech’s closed ecosystems. Politicians and policy makers in places like the European Union and the United States have introduced new legislation or regulations or started lawsuits against Big Tech firms in order to force them to open up their enclaves. The same is happening in Canada with the continuing reform of the Competition Act.
Now there’s a case that pits super-apps against an existing Big Tech enclave. It’s a good example of why these policy actions matter to us and our economies. In March, 2024, the U.S. Department of Justice, along with 16 U.S. states, launched a lawsuit against Apple Inc. for monopolization or attempted monopolization of smartphone markets. A key part of the suit concerns allegations of Apple limiting the functionality of super-apps.
While super-apps might seem to compete with Big Tech incumbents like Apple and reduce their dominance, they also have the potential to become yet another enclave. The whole point of a super-app is to lock users into an ecosystem so that the various digital dynamics can come into play – such as network effects – making it increasingly difficult for users to jump ship.
Ultimately, super-apps might not challenge Big Tech firms like Apple, Alphabet, Amazon, Meta, and Microsoft, but rather simply reinforce their market dominance, if those firms manage to keep their existing apps under their thumbs; or, even if the super-apps do undermine that market dominance, they may simply replace one set of enclaves with another.
Or these apps will come from Big Tech itself. When it comes to super-apps, after all, the firms best positioned to develop and disseminate them are the Big Tech firms that have an enormous stranglehold on our data. One of the problems repeatedly raised by competition authorities is the fact that control over data enables these Big Tech firms to move easily into adjacent markets, potentially undermining competition through digital scale and market power. We can already see this at work in the way that Big Tech firms expand their businesses into financial products like Google Pay or Apple Pay.
More important, though, is where all this leads.
Digital technologies are deeply implicated in creating enclaves in which controlling the very information on which markets depend to operate is a key business and innovation strategy.
Enclaves entail control over access to market information like pricing, pricing dynamics, selling and buying preferences, etc., as well as the capacity to experiment with this information to find out how best to extract every last ounce of revenue. This includes dynamic pricing practices, such as those undertaken by ride-hailing firms, or developing products using a competitor’s information when they use your retail platform. Within an enclave, there are no markets any more.
All of this is compounded by the introduction super-apps which will extend enclave dynamics across multiple markets. And, in so doing, these super-apps are likely to reinforce existing problems with market dominance, rather than challenge it.