As markets across different industries are increasingly getting concentrated around a few but powerful digital platform-firms which has significant implications for public policy, innovation, and other interconnected firms’ strategies in the business ecosystem, there is a need to better understand the factors driving platform-firms’ strategic decisions of acquiring other firms to actively shape the market structure. To that end, this study formulates theoretical propositions and develops a conceptual framework outlining the antecedents of digital platforms-firms’ acquisitions of target firms by integrating complementary perspectives from the capabilities-based theory on acquisitions and theory on platform competition. I argue that aside from traditional focus on sources of acquisition value creation such as economies of scale, resource reconfiguration and others in non-platform firm contexts, platform-firms are likely to undertake capability-motivated acquisitions due to expected sources of value creation such as strengthening intertemporal-based same-side and cross-side network effects, reducing complementor multihoming, increasing product market diversification based on demand-side heterogeneity and building absorptive capacity in advanced technological domains such as Artificial Intelligence and Machine Learning.
