Competition Law and Cascading Ecosystem Dependencies

1. Introduction

Cascading ecosystem dependency describes a competition problem in which dependence on one important product, platform, infrastructure, data layer, operating system, or intermediary creates successive dependencies across several connected markets.

The basic structure is:

Core infrastructure → intermediary/platform → complementary service → downstream business → consumers

A firm controlling the upstream layer may therefore acquire or reinforce market power at several downstream levels without necessarily monopolising every individual market.

This issue is particularly significant in digital ecosystems, but the same economic structure can arise in payments, telecommunications, cloud computing, app stores, energy infrastructure, logistics, transport, healthcare platforms and other network industries.

EU competition law increasingly recognises that an ecosystem may consist of interconnected products and services whose competitive conditions affect one another. The General Court expressly considered the concept of a digital ecosystem in Google Android.

2. Meaning of Cascading Ecosystem Dependency

A cascading dependency exists where:

1. A firm controls an important upstream layer;
2. downstream firms require access to that layer;
3. access to the upstream layer determines competitive conditions in another market;
4. dependency is transmitted to further markets; and
5. the dominant firm can use the resulting leverage to protect or expand its position.

Example

Consider a hypothetical digital ecosystem:

Operating system

↓

App store

↓

Payment system

↓

Application developers

↓

Consumer data

↓

Advertising market

A restriction imposed at the operating-system level may consequently affect:

• app distribution;
• app payments;
• competing applications;
• access to consumer data;
• advertising;
• cloud services; and
• downstream innovation.

Thus, competition authorities may need to examine the whole chain of competitive dependencies, rather than treating each market in isolation.

3. Legal Framework

Cascading ecosystem dependency is not a standalone offence. It is an economic pattern that may be addressed through established competition-law doctrines.

The principal provisions and doctrines include:

A. Abuse of dominance

Under Article 102 TFEU, conduct by a dominant undertaking may be abusive where it uses its position to exclude competitors, restrict access, impose unfair conditions, or leverage market power into adjacent markets.

For Denmark, the corresponding framework is primarily found in Section 11 of the Danish Competition Act, alongside EU competition law where Article 102 TFEU applies.

B. Article 101 TFEU

Agreements between ecosystem participants may raise Article 101 issues where they:

• restrict access to competing platforms;
• impose exclusivity;
• allocate markets;
• restrict interoperability;
• impose anti-competitive vertical restraints; or
• facilitate coordinated conduct.

C. Tying and bundling

A dominant firm may connect an indispensable or highly important product with another product, making entry into the second market dependent upon access to the first.

D. Refusal of access

A dominant undertaking controlling an important infrastructure or interface may face competition-law scrutiny when it refuses access or interoperability.

E. Self-preferencing

An ecosystem operator can potentially use control over an intermediary platform to favour its own downstream products.

F. Interoperability

Interoperability can become particularly important where competitors cannot effectively compete without access to technical functionality controlled by the ecosystem owner.

The EU's recent Android Auto and Android decisions demonstrate the increasing importance of interoperability in ecosystem competition.

4. How the Cascade Operates

Stage 1 — Control of a critical layer

The undertaking obtains substantial market power over:

• an operating system;
• cloud infrastructure;
• app store;
• payment network;
• search engine;
• advertising exchange;
• telecommunications network;
• data infrastructure; or
• another essential input.

Stage 2 — Dependency of complementors

Third-party businesses become dependent upon the infrastructure because consumers, developers or suppliers are concentrated there.

Stage 3 — Transmission of dependency

The third parties themselves become gateways to additional markets.

For example:

OS → App store → Developer → Consumer → Advertising

Stage 4 — Leveraging

The ecosystem operator can potentially impose:

• tying;
• bundling;
• exclusivity;
• discriminatory access;
• technical restrictions;
• interoperability limitations;
• preferential ranking;
• data restrictions;
• excessive commissions; or
• contractual restrictions.

Stage 5 — Entrenchment

The resulting restrictions may produce:

• higher entry barriers;
• switching costs;
• reduced multi-homing;
• network effects;
• data advantages;
• reduced innovation;
• foreclosure of competitors; and
• reinforcement of the original ecosystem.

This creates a feedback loop:

Market power → dependency → foreclosure → stronger ecosystem → greater dependency.

5. Six Major Case Laws

1. Microsoft Corp. v Commission

Case T-201/04, General Court, 2007

This is one of the most important authorities for ecosystem dependency.

Microsoft possessed substantial power through the Windows operating system. The Commission found problems involving:

• refusal to provide interoperability information; and
• tying Windows Media Player to Windows.

The General Court upheld the Commission's principal findings.

Relevance to cascading dependency

Windows operated as an upstream platform upon which other software products depended.

Microsoft could therefore affect competition in complementary software markets through conduct concerning the operating system.

The case demonstrates how control over an upstream technological layer can influence downstream competition.

It is especially important for:

• interoperability;
• platform power;
• tying;
• refusal to supply;
• network effects; and
• technical compatibility.

The EU's later ecosystem analysis continues to rely upon Microsoft in considering interoperability and tying.

2. Google and Alphabet v Commission — Google Android

Case T-604/18, General Court, 2022; C-738/22 P, Court of Justice, 2026

This is particularly important because the General Court expressly addressed the concept of a digital ecosystem.

The case concerned Google's Android ecosystem, including:

• Android operating systems;
• Play Store;
• Google Search;
• Chrome;
• device manufacturers;
• mobile network operators; and
• anti-fragmentation arrangements.

The General Court treated Google's conduct as interconnected elements of a broader strategy involving product bundles, exclusivity payments and anti-fragmentation obligations.

The Court of Justice issued its appellate judgment on 2 July 2026, addressing tying, exclusionary effects, exclusive pre-installation payments and Android forks.

Relevance

The case demonstrates how dependencies can cascade:

Android → device manufacturers → Play Store → applications → Search → consumers

Control of one layer can therefore reinforce market power elsewhere.

It is arguably one of the clearest modern authorities for analysing ecosystem-wide competitive effects.

3. Google and Alphabet v Commission — Google Shopping

Case T-612/17, General Court, 2021

The Google Shopping case concerned Google's treatment of its own comparison-shopping service within general search results.

The General Court largely upheld the Commission's decision.

Relevance to ecosystem dependency

Search was an important upstream gateway through which consumers accessed competing services.

The competitive issue was therefore not simply whether Google operated a search engine and a shopping service. The important question was how control over the gateway could influence downstream competition.

This illustrates:

Gateway power → preferential treatment → downstream foreclosure

The EU's subsequent ecosystem analysis continues to cite Google Shopping in connection with digital ecosystems and network effects.

4. Bronner v Mediaprint

Case C-7/97, Court of Justice, 1998

Bronner established important principles governing refusal to supply and access to infrastructure.

The case concerned a newspaper home-delivery system.

The Court applied a demanding test before requiring a dominant undertaking to provide access to its infrastructure.

Relevance to ecosystems

The case establishes an important principle:

Competition law does not automatically require a dominant undertaking to share every facility with competitors.

However, where control over infrastructure produces serious competitive dependency, refusal of access can become legally significant if the applicable conditions are satisfied.

The Bronner principles remain part of the legal framework for analysing access and essential facilities, although later digital-platform jurisprudence has distinguished situations involving platforms designed to accommodate third-party complementors.

5. IMS Health v NDC Health

Case C-418/01, Court of Justice, 2004

IMS Health concerned access to an intellectual-property-protected system used for pharmaceutical data.

The Court developed the circumstances in which refusal to license intellectual property may constitute an abuse.

Relevance to cascading dependency

The case is particularly important where a dominant ecosystem owner controls:

• proprietary data;
• technical standards;
• interfaces;
• software architecture;
• intellectual property; or
• industry-specific information systems.

Where downstream competitors depend upon such an input, competition law may need to examine whether the refusal prevents effective downstream competition.

The case is traditionally discussed alongside Magill, Bronner and Microsoft in the development of EU access/refusal-to-supply doctrine.

6. Alphabet and Others — Android Auto

Case C-233/23, Court of Justice, 25 February 2025

This is a particularly important modern ecosystem case.

The dispute concerned Google's Android Auto platform and access by a third-party application.

The Court addressed whether the stringent Bronner conditions should automatically govern a refusal to provide interoperability with a digital platform that is designed to accommodate third-party complementors.

The Court did not simply apply the traditional Bronner framework mechanically in this setting. The judgment provides important guidance concerning interoperability and objective justification.

Relevance

The case is highly significant for cascading ecosystem dependencies because:

Operating system → platform functionality → third-party applications → consumers

If an ecosystem operator controls interoperability at the platform level, its decision can affect competition in multiple downstream services.

6. Additional Relevant Authority — Magill

RTE and ITP v Commission — Magill

Joined Cases C-241/91 P and C-242/91 P, 1995

Magill is a foundational authority concerning refusal to license intellectual property.

The Court recognised that exceptional circumstances can transform refusal to license into abusive conduct.

Its principles became part of the later IMS Health jurisprudence.

Ecosystem significance

Modern ecosystem dependencies can involve:

• APIs;
• data;
• software interfaces;
• standards;
• interoperability information;
• proprietary databases; and
• technical specifications.

Magill therefore remains relevant when ecosystem control intersects with intellectual property rights.

7. Cascading Dependency and Tying

Tying can be especially powerful in ecosystems.

Suppose:

Product A = dominant operating system
Product B = payment service
Product C = advertising service

If access to A effectively requires adoption of B, and B subsequently gives the undertaking an advantage in C, the competitive effect can cascade.

The legal analysis normally examines:

1. whether the products are distinct;
2. whether the undertaking is dominant in the tying product;
3. whether customers are coerced or practically compelled;
4. whether the conduct can foreclose competitors;
5. the degree of market coverage;
6. whether competitors can offset the advantage; and
7. objective justifications or efficiencies.

The 2026 Google Android judgment specifically addresses tying and exclusionary effects in this context.

8. Cascading Dependency and Refusal of Access

An ecosystem may create several levels of access:

A refusal at Level 1 may consequently have effects at Levels 2–6.

However, dependency alone is not sufficient to establish an abuse. Competition authorities must establish the relevant legal conditions and competitive effects.

9. Network Effects

Cascading ecosystems frequently exhibit direct and indirect network effects.

Direct network effect

The value of a service increases as more users join.

Indirect network effect

More users attract more complementors, and more complementors attract more users.

For example:

More smartphone users
↓
More developers
↓
More applications
↓
More consumers
↓
More data
↓
Better ecosystem services
↓
More users

This can make an ecosystem self-reinforcing.

The European Commission's current competition materials expressly recognise direct and indirect network effects in analysing digital ecosystems.

10. Data as a Cascading Dependency

Data can create another layer of dependency.

For example:

Search engine

→ consumer queries

→ behavioural data

→ advertising optimisation

→ advertiser demand

→ additional revenue

→ investment in search infrastructure

→ stronger search position.

A competitor entering only the advertising market may therefore be disadvantaged because it does not possess equivalent upstream data.

This creates a potential data-network cascade.

Competition analysis can consequently consider:

• data access;
• data portability;
• data interoperability;
• exclusive data;
• data combination;
• switching costs; and
• whether rivals can realistically obtain equivalent inputs.

11. Interoperability as a Competition Remedy

Interoperability can interrupt the cascade.

Instead of:

Dominant ecosystem → closed interface → dependent complementors

the system becomes:

Dominant ecosystem ↔ interoperable competitors ↔ consumers

This can reduce:

• switching costs;
• entry barriers;
• network-effect advantages;
• lock-in;
• data advantages; and
• dependence upon a single ecosystem.

The EU's Digital Markets Act illustrates this regulatory approach. In July 2026, the Commission adopted measures requiring Google to provide effective interoperability for competing AI services with specified Android features.

This is important because it demonstrates that competition regulation and ex-ante digital regulation can operate alongside traditional Article 102 analysis.

12. Self-Preferencing and Cascading Effects

An ecosystem operator may operate both:

1. the infrastructure/platform; and
2. a downstream competing service.

This creates a structural conflict.

Example:

Marketplace controls ranking algorithm
↓
Marketplace owns logistics service
↓
Ranking favours logistics-compatible sellers
↓
Sellers adopt the ecosystem's logistics service
↓
Logistics competitors lose scale
↓
Marketplace strengthens its downstream position

The competitive concern is therefore not merely preferential ranking. It is the cascade of dependency created by the preference.

13. Lock-In and Switching Costs

Cascading ecosystems often create multiple simultaneous switching costs:

• financial costs;
• technical migration costs;
• data migration costs;
• contractual costs;
• loss of accumulated reputation;
• loss of customer relationships;
• retraining costs;
• loss of interoperability; and
• loss of ecosystem-specific functionality.

A consumer may therefore remain within an ecosystem even when an alternative individual product is attractive.

This can reduce contestability even where nominal alternatives exist.

14. Essential Facilities and Digital Ecosystems

The traditional essential-facilities doctrine is particularly relevant but must be applied carefully.

The major authorities include:

• Magill;
• Bronner;
• IMS Health;
• Microsoft; and
• Android Auto.

Modern jurisprudence distinguishes between a traditional facility that a competitor wants to access and a platform deliberately designed as an interface for third-party complementors.

The Android Auto judgment is particularly significant in this respect.

15. Competition Risks in Different Ecosystems

Digital ecosystems

• app-store restrictions;
• operating-system tying;
• API discrimination;
• self-preferencing;
• data combination;
• interoperability restrictions.

Cloud ecosystems

• cloud migration barriers;
• data portability restrictions;
• proprietary APIs;
• interoperability limitations;
• contractual lock-in.

Payments

• access discrimination;
• wallet interoperability;
• routing restrictions;
• tying payment services to platforms.

Telecommunications

• network access;
• roaming;
• device compatibility;
• API access;
• infrastructure foreclosure.

Energy

• grid access;
• balancing platforms;
• storage interoperability;
• charging networks;
• software lock-in.

Logistics

• platform access;
• delivery infrastructure;
• algorithmic allocation;
• preferential treatment;
• exclusive logistics arrangements.

16. Competition-Law Test for Cascading Ecosystem Dependency

A competition authority can structure its analysis as follows:

Step 1 — Identify the ecosystem

What products and services are interconnected?

Step 2 — Identify the dependency chain

Infrastructure → platform → complementor → downstream service → consumer

Step 3 — Define relevant markets

Avoid assuming that the entire ecosystem constitutes one market.

Step 4 — Determine market power

Examine:

• market share;
• network effects;
• switching costs;
• entry barriers;
• data advantages;
• economies of scale;
• interoperability; and
• multi-homing.

Step 5 — Identify the conduct

Is there:

• tying?
• bundling?
• refusal of access?
• discriminatory access?
• self-preferencing?
• exclusivity?
• technical degradation?
• data restriction?

Step 6 — Identify foreclosure

Could the conduct prevent equally efficient or otherwise effective competitors from expanding?

Step 7 — Trace the cascade

Analyse effects beyond the immediately affected market.

Step 8 — Examine efficiencies

Consider:

• security;
• privacy;
• technical integrity;
• quality;
• transaction-cost savings;
• innovation; and
• consumer convenience.

Step 9 — Consider remedies

Possible remedies include:

• interoperability;
• non-discrimination;
• data portability;
• access obligations;
• removal of contractual restrictions;
• technical separation;
• transparency;
• monitoring; or
• structural remedies in exceptional circumstances.

17. Important Distinction: Ecosystem Size ≠ Illegal Dominance

A large ecosystem is not itself unlawful.

Competition law does not prohibit:

• successful platforms;
• network effects;
• vertical integration;
• product integration;
• economies of scale; or
• proprietary technology.

The legal issue arises when market power is used through particular conduct that satisfies the applicable competition-law test.

This distinction is particularly important in technology markets because integrated products can generate legitimate efficiencies.

18. Denmark-Specific Perspective

For Danish markets, cascading ecosystem dependency should be examined primarily under:

• Danish Competition Act;
• Section 11 concerning abuse of dominant position;
• Section 6 concerning restrictive agreements;
• Article 101 TFEU;
• Article 102 TFEU; and
• relevant EU digital regulation, particularly the DMA where designated gatekeepers are involved.

The Danish Competition Council has also dealt with platform dependency in the digital economy. In June 2026, for example, it found that Meta's treatment of a Danish clothing retailer breached the EU Platform-to-Business Regulation, highlighting the practical importance of dependence upon a major platform as a business channel.

That case was not itself an Article 102 abuse case, but it illustrates the broader regulatory problem: a business can become commercially dependent upon a platform even without the platform being its conventional supplier.

19. Key Case-Law Principles

20. Conclusion

Cascading ecosystem dependency is best understood as a method of analysing how market power travels through interconnected markets.

The central competition-law concern is:

Control of one critical layer → dependency of complementors → leveraging into adjacent markets → foreclosure → stronger ecosystem → deeper dependency.

The most important legal tools for addressing the problem are abuse of dominance, tying and bundling, refusal of access, interoperability obligations, discriminatory access, self-preferencing, exclusivity and vertical restraints.

The jurisprudence from Microsoft, Magill, Bronner, IMS Health, Google Shopping, Google Android and Android Auto demonstrates the evolution from traditional infrastructure-based competition analysis toward increasingly sophisticated examination of multi-layer digital ecosystems.

For examination purposes, the key proposition is:

Competition law should examine not merely whether an undertaking controls a particular market, but whether its control over one layer of an interconnected ecosystem allows it to transmit, reinforce or extend market power through successive dependent markets.