Tech giants release free open-source software as a 'poison pill' to force competitors to stop their own research.
April 1, 2026
Original Paper
Commoditize Your Complement: Strategic Open-Source Releases and the Cannibalization of Rival Firms
SSRN · 6502879
The Takeaway
We usually think of open-source as a gift to the community, but this study shows dominant firms use it to 'commoditize' their rivals' products. By giving away a tool for free, they force competitors to abandon their own innovation and spend their time maintaining the giant's tool instead, leading to a massive transfer of market value to the dominant firm.
From the abstract
Why do firms release open-source software for free? This paper investigates how dominant technology firms strategically release free open-source software (OSS) to commoditize complementary markets and devalue competitors' proprietary assets. Exploiting the staggered release of major GitHub repositories, I find that this strategy triggers a wealth transfer: focal firms experience a 13.9% increase in market valuation, capturing over $406 billion in aggregate wealth, while exposed rivals suffer a 7