A Protracted War Against Counterfeits: Navigating Tension Management Under External Pressures on an E-Commerce Platform

Abstract

This study examines how external pressures drive a platform leader to fight counterfeiting over time. Acknowledging the tension between the illegality and legitimacy of counterfeiting, we find that the fighting effort involves an enduring balance between the two poles of the tension until counterfeits have been sharply reduced. We demonstrate how the management of the tension entails an interactive process in which a platform leader decouples counterfeit fighting actions to pursue legitimacy. We suggest that pressures from external forces predict a process of decoupling and legitimation through which the platform leader promotes ecosystem acceptance and builds a shared understanding of ecosystem purposes, and the endeavours to balance platform quality and activity prompt the platform leader to pursue legitimation which demonstrates the viability of an ecosystem. We show that these processes are accompanied by activating and stabilising the tension, which predicts varied strength and scope of measures and the reduction of counterfeits over time.