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multiple interconnected products and services within the same ecosystem, switching
costs increase significantly, reinforcing long-term platform dependence—commonly
conceptualized as the “lock-in” effect in network economics (Carl Shapiro and Hal R.
Varian, 1999).
Moreover, end-to-end control of the digital value chain facilitates the consistent
deployment of DRM mechanisms. In this context, DRM functions not only as a copyright
protection tool but also as a technological instrument for maintaining ecosystem integrity,
ensuring that access, distribution, and usage of content conform to rules defined by the
platform owner (Lessig, 2006).
Accordingly, the “walled garden” model should be understood not merely as a
restrictive competitive practice, but as a techno-economic organizational form aimed at
optimizing ecosystem value and sustaining competitive advantage in digital markets
(Evinger, 2024).
3.2. DRM as a mechanism for structuring the digital content market
During the early development of the online music market, Apple Inc. implemented
the FairPlay DRM system to control and regulate the use of digital content distributed
through its platform. This system not only restricted unauthorized copying but also
limited the ability to play purchased content on devices outside the company’s ecosystem.
From a theoretical standpoint, this case exemplifies the argument that technological
architecture can function as a form of regulation equivalent to legal rules (Lessig, 2006).
Rather than relying exclusively on ex post legal enforcement, the firm embedded usage
constraints directly into its technological design, thereby governing consumer behavior ex
ante. Furthermore, DRM in this context extends beyond copyright protection to actively
shape market structure. By restricting interoperability across competing distribution
systems, DRM contributes to reinforcing ecosystem boundaries and consolidating
platform-based market power (Evinger, 2024).
3.3. Creation of consumer Lock-in effects
A central outcome of integrating DRM within a closed ecosystem is the creation of
consumer lock-in effects. Once users invest in digital content, applications, and devices
within a specific ecosystem, switching to alternative platforms entails both financial and
functional costs, including the potential loss of access to previously acquired digital assets.
According to (Carl Shapiro and Hal R. Varian, 1999), Shapiro and Varian (1999), such lock-
in represents a fundamental competitive strategy in the information economy, where
firms construct interconnected value networks rather than merely offering standalone
products. By leveraging this mechanism, Apple Inc. successfully expanded its revenue
model from hardware sales to content distribution and, subsequently, to integrated
digital services.
3.4. Balancing technological control and user experience
Although the “walled garden” model is frequently criticized for restricting
competition, this case demonstrates that a high degree of technological control can
coexist with enhanced user experience. The tight integration of hardware and software
reduces security vulnerabilities, minimizes exposure to malicious applications, and
ensures system stability. As noted by (Gillespie, 2018), major digital platforms increasingly
operate as “private governors,” establishing their own rules within proprietary
ecosystems. In this context, DRM functions as a mechanism of technical governance,
ensuring consistency, security, and the commercial viability of digital content within the
platform environment.

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