Vendor lock-in

In economics, vendor lock-in, also known as proprietary lock-in or customer lock-in, makes a customer dependent on a vendor for products, unable to use another vendor without substantial switching costs.
The use of open standards and alternative options makes systems tolerant of change, so that decisions can be postponed until more information is available or unforeseen events are addressed. Vendor lock-in does the opposite: it makes it difficult to move from one solution to another.
Lock-in costs that create barriers to market entry may result in antitrust action against a monopoly.
This class of lock-in is potentially technologically hard to overcome if the monopoly is held up by barriers to market that are nontrivial to circumvent, such as patents, secrecy, cryptography or other technical hindrances.
This class of lock-in is potentially inescapable to rational individuals not otherwise motivated, by creating a prisoner's dilemma—if the cost to resist is greater than the cost of joining, then the locally optimal choice is to join—a barrier that takes cooperation to overcome. The distributive property (cost to resist the locally dominant choice) alone is not a network effect, for lack of any positive feedback; however, the addition of bistability per individual, such as by a switching cost, qualifies as a network effect, by distributing this instability to the collective as a whole.
As defined by The Independent, this is a non-monopoly (mere technology), collective (on a society level) kind of lock-in:
Examples:
Technology lock-in, as defined, is strictly of the collective kind. However, the personal variant is also a possible permutation of the variations shown in the table, but with no monopoly and no collectivity, it would be expected to be the weakest lock-in. Equivalent personal examples:
There exist lock-in situations that are both monopolistic and collective. Having the worst of two worlds, these can be very hard to escape — in many examples, the cost to resist incurs some level of isolation from the (dominating technology in) society, which can be socially costly, yet direct competition with the dominant vendor is hindered by compatibility.
As one blogger expressed:
While MP3 is patent-free as of 2017, in 2001 it was both patented and entrenched, as noted by Richard Stallman in that year (in justifying a lax license for Ogg Vorbis):
More examples:
The European Commission, in its March 24, 2004 decision on Microsoft's business practices, quotes, in paragraph 463, Microsoft general manager for C++ development Aaron Contorer as stating in a February 21, 1997 internal Microsoft memo drafted for Bill Gates:
Microsoft's application software also exhibits lock-in through the use of proprietary file formats. Microsoft Outlook uses a proprietary, publicly undocumented datastore format. Present versions of Microsoft Word have introduced a new format MS-OOXML. This may make it easier for competitors to write documents compatible with Microsoft Office in the future by reducing lock-in. Microsoft released full descriptions of the file formats for earlier versions of Word, Excel and PowerPoint in February 2008.
Prior to March 2009, digital music files with digital rights management (DRM) were available for purchase from the iTunes Store, encoded in a proprietary derivative of the AAC format that used Apple's FairPlay DRM system. These files are compatible only with Apple's iTunes media player software on Macs and Windows, their iPod portable digital music players, iPhone smartphones, iPad tablet computers, and the Motorola ROKR E1 and SLVR mobile phones. As a result, that music was locked into this ecosystem and available for portable use only through the purchase of one of the above devices, or by burning to CD and optionally re-ripping to a DRM-free format such as MP3 or WAV.
In January 2005, an iPod purchaser named Thomas Slattery filed a suit against Apple for the "unlawful bundling" of their iTunes Music Store and iPod device. He stated in his brief:
At the time, Apple was stated to have an 80% market share of digital music sales and a 90% share of sales of new music players, which he claimed allowed Apple to horizontally leverage its dominant positions in both markets to lock consumers into its complementary offerings. In September 2005, U.S. District Judge James Ware approved Slattery v. Apple Computer Inc. to proceed with monopoly charges against Apple in violation of the Sherman Antitrust Act.
On June 7, 2006, the Norwegian Consumer Council stated that Apple's iTunes Music Store violates Norwegian law. The contract conditions were vague and "clearly unbalanced to disfavor the customer". The retroactive changes to the DRM conditions and the incompatibility with other music players are the major points of concern. In an earlier letter to Apple, consumer ombudsman Bjørn Erik Thon complained that iTunes' DRM mechanism was a lock-in to Apple's music players, and argued that this was a conflict with consumer rights that he doubted would be defendable by Norwegian copyright law.
As of 29 May 2007, tracks on the EMI label became available in a DRM-free format called iTunes Plus. These files are unprotected and are encoded in the AAC format at 256 kilobits per second, twice the bitrate of standard tracks bought through the service. iTunes accounts can be set to display either standard or iTunes Plus formats for tracks where both formats exist. These files can be used with any player that supports the AAC file format and are not locked to Apple hardware. They can be converted to MP format if desired.
As of January 6, 2009, all four big music studios (Warner Bros., Sony BMG, Universal, and EMI) have signed up to remove the DRM from their tracks, at no extra cost. However, Apple charges consumers to have previously purchased DRM music restrictions removed.
Although Google has stated its position in favor of interoperability, the company has taken steps away from open protocols replacing open standard Google Talk by proprietary protocol Google Hangouts. Also, Google's Data Liberation Front has been inactive on Twitter since 2013 and its official website, www.dataliberation.org, now redirects to a page on Google's FAQs, leading users to believe the project has been closed. Google's mobile operating system Android is open source; however, the operating system that comes with the phones that most people actually purchase in a store is more often than not shipped with many of Google's proprietary applications that promote users to use only Google services.