Competition Law and Competition Governance in Connected Environments

Introduction

A connected environment is an economic or technological environment in which products, services, devices, platforms, software, networks, data systems, and users are interconnected and depend upon one another. Examples include:

• Internet of Things (IoT) ecosystems;
• smartphones and connected devices;
• smart homes;
• connected vehicles and charging networks;
• cloud-computing ecosystems;
• wearable devices;
• connected healthcare systems;
• smart grids;
• digital payment ecosystems;
• industrial IoT and automated manufacturing; and
• AI-enabled interconnected platforms.

Competition law in such environments is no longer concerned only with competition between individual products. Competition may occur between entire ecosystems, where control over one technological layer can influence competition in several adjacent markets. EU competition-law materials expressly recognise digital ecosystems as environments in which interconnected products and services may interact across horizontal and vertical relationships.

The central competition-governance problem is therefore:

How can law preserve interoperability, innovation, consumer choice and contestability when one undertaking controls an important technological ecosystem or gateway?

1. Meaning of Competition Governance in Connected Environments

Competition governance refers to the combination of:

1. competition legislation;
2. regulatory oversight;
3. interoperability requirements;
4. access obligations;
5. data-portability rules;
6. merger control;
7. monitoring and compliance mechanisms;
8. technical standards;
9. consumer-protection rules; and
10. remedies against exclusionary conduct.

Traditional antitrust generally intervenes after potentially anti-competitive conduct occurs. Connected environments increasingly require ex ante governance, because network effects and switching costs can allow a digital ecosystem to become difficult to challenge before conventional market structures reveal the problem.

The EU's Digital Markets Act is an important example. Article 6(7) requires designated gatekeepers to provide third parties with access to certain operating-system hardware and software features on an interoperable basis.

2. Characteristics of Connected Markets

A. Network Effects

The value of a connected ecosystem often increases as more users, developers, manufacturers and service providers join it.

For example:

More users → more developers → more applications → greater consumer value → more users

This creates a feedback loop that can strengthen an incumbent.

B. Interoperability

Interoperability means that different technological systems can communicate and function together.

Competition concerns arise when a dominant undertaking:

• withholds technical information;
• restricts APIs;
• limits access to operating-system functions;
• prevents rival devices from connecting;
• imposes incompatible standards; or
• gives its own products superior technical access.

The EU's current DMA framework specifically treats interoperability as a contestability issue for connected devices.

C. Switching Costs

Consumers may become locked into an ecosystem because their:

• data;
• applications;
• subscriptions;
• devices;
• accessories;
• payment methods;
• health records;
• preferences; and
• digital identities

are integrated into that ecosystem.

A technically free choice may therefore not be an economically realistic choice.

D. Data Advantages

Connected ecosystems generate enormous amounts of data.

The ecosystem operator may possess:

• device data;
• behavioural data;
• location information;
• search data;
• usage data;
• transaction data;
• performance information; and
• interoperability data.

Control over these datasets can become a competitive advantage.

The European Commission's 2026 Android measures, for example, addressed access by third-party search services to search data collected at scale by Google.

3. Principal Competition-Law Concerns

3.1 Abuse of Dominance

A dominant ecosystem operator may engage in:

• exclusionary interoperability restrictions;
• tying;
• bundling;
• discriminatory access;
• self-preferencing;
• refusal to supply;
• loyalty incentives;
• restrictive licensing; or
• discriminatory API access.

The relevant legal question is not simply whether the undertaking has a large ecosystem, but whether its conduct harms the competitive process.

3.2 Tying and Bundling

A connected environment makes tying particularly powerful.

For example:

Operating system + app store + browser + search + payment service

can become a vertically integrated ecosystem.

The concern is that dominance in one layer can be leveraged into another.

3.3 Self-Preferencing

An ecosystem owner may operate a platform while simultaneously competing with businesses dependent upon that platform.

Examples include:

• a marketplace ranking its own products;
• an app store favouring its own applications;
• a search engine privileging affiliated services;
• a connected-device platform giving proprietary hardware privileged access.

This creates a structural conflict between the platform's role as infrastructure provider and its role as competitor.

3.4 Refusal of Interoperability

A refusal to provide interoperability information can be particularly significant where:

1. the infrastructure is important for competing;
2. competitors cannot reasonably reproduce the interface;
3. access is necessary for effective competition; and
4. the refusal produces exclusionary effects.

This issue was central to the Microsoft interoperability litigation.

4. Major Case Laws

1. Microsoft Corp. v Commission

Case T-201/04, General Court (2007)

Facts

Microsoft was found to have abused its dominant position in PC operating systems, including through restrictions concerning interoperability information and tying its Windows Media Player to Windows.

Competition issue

The interoperability aspect concerned Microsoft's refusal to provide sufficient interoperability information to competing work-group server operating systems.

Legal significance

The case demonstrates that technical interoperability information can constitute an important competitive input.

The Court accepted that Microsoft's conduct could restrict competition where competitors needed interoperability information to compete effectively.

Principle

Control over technical compatibility can become a source of market power.

This remains highly relevant to connected-device, IoT, cloud and industrial-platform markets.

2. Google Android

European Commission Decision, AT.40099 (2018); General Court, T-604/18 (2022); CJEU, C-738/22 P (2025/2026 developments)

The Android case concerned Google's ecosystem consisting of:

• Android;
• Google Play;
• Google Search;
• Chrome; and
• agreements with manufacturers and mobile network operators.

The General Court expressly discussed the concepts of multi-sided platforms and ecosystems.

Principal concerns

The Commission examined:

• tying of Google Search and Chrome;
• exclusivity arrangements;
• anti-fragmentation obligations; and
• the relationship between Android and other components of Google's ecosystem.

Importance

The case demonstrates how competition law can analyse conduct spanning several interconnected technological layers rather than treating every product as completely isolated.

The EU litigation also illustrates that ecosystem competition can involve hardware manufacturers, operating systems, applications and search services simultaneously.

3. Google Shopping

Case T-612/17; Commission Decision AT.39740

Facts

Google operated a dominant general search service while also providing its own comparison-shopping service.

Competition concern

Google was found to have given its own comparison-shopping service more favourable positioning and display treatment than competing comparison-shopping services.

Relevance to connected environments

The case illustrates self-preferencing.

The broader principle is particularly important where an ecosystem operator simultaneously:

1. controls an infrastructure;
2. controls access to consumers; and
3. competes with businesses dependent on that infrastructure.

This can arise in connected-device marketplaces, IoT platforms, smart-home ecosystems and automotive platforms.

4. Apple – App Store / Music Streaming

Commission Decision AT.40437 (2024)

The Commission examined Apple's App Store rules concerning music-streaming applications and restrictions affecting how developers could inform users about alternative purchasing possibilities.

Competition significance

The case demonstrates the importance of:

• platform rules;
• steering restrictions;
• access conditions;
• payment architecture; and
• the economic relationship between platform operators and dependent developers.

The Commission's decision is among the decisions now cited in EU materials concerning ecosystem competition and multi-sided platforms.

Connected-environment relevance

The same structural issue can arise when a connected-device manufacturer controls:

device → operating system → app store → payment → subscription

and imposes conditions on businesses operating within that chain.

5. Qualcomm

Case AT.39711 – Qualcomm (Predation); AT.40220 – Qualcomm (Exclusivity Payments)

Qualcomm's cases illustrate competition concerns in technologically interconnected markets involving chipsets and mobile communications.

Importance

The cases demonstrate how conduct at an upstream technological layer can affect competition downstream.

In connected environments, components such as:

• processors;
• modems;
• communications chips;
• connectivity standards; and
• essential technical interfaces

can influence the competitive conditions of entire device ecosystems.

Principle

Competition analysis must consider vertical dependencies, rather than examining a connected product in isolation.

6. Samsung – Enforcement of UMTS Standard Essential Patents

Case AT.39939

Facts

The case concerned Samsung's enforcement of standard-essential patents relating to mobile communications standards.

Competition issue

Standardisation can produce substantial network effects because manufacturers and service providers must comply with common technological standards.

A patent holder may consequently possess considerable leverage once its technology is incorporated into a standard.

Competition significance

The case illustrates the relationship between:

standardisation → interoperability → intellectual property → market power

This is particularly important in:

• IoT;
• 5G;
• connected vehicles;
• smart grids;
• industrial automation; and
• connected healthcare.

7. Microsoft / Activision Blizzard

EU Merger Case M.10646 (2023)

Although primarily a merger case rather than an abuse-of-dominance case, the transaction demonstrated the importance of ecosystem effects.

The analysis involved Microsoft's broader technological ecosystem and concerns about how control over important content could affect adjacent markets.

The case illustrates that competition authorities increasingly examine ecosystem-level effects in merger control, rather than considering only immediate horizontal overlaps. Academic analysis of recent EU and UK merger decisions specifically identifies the tension between traditional market definitions and forward-looking ecosystem analysis.

5. Competition Governance Model

A connected environment can be analysed through the following framework:

Step 1 — Identify the ecosystem

Identify:

• platform owner;
• users;
• complementary providers;
• hardware manufacturers;
• software developers;
• data providers;
• infrastructure operators.

Step 2 — Identify the gateway

Determine whether one undertaking controls a critical gateway such as:

• operating system;
• app store;
• cloud platform;
• payment system;
• API;
• network;
• data repository;
• device certification system.

Step 3 — Analyse dependency

Ask:

Can businesses and consumers realistically operate outside the ecosystem?

Consider:

• switching costs;
• data portability;
• multi-homing;
• compatibility;
• interoperability;
• technical standards.

Step 4 — Identify competitive conduct

Examine:

• tying;
• bundling;
• self-preferencing;
• discriminatory access;
• exclusive dealing;
• refusal to interoperate;
• data restrictions;
• predatory pricing;
• loyalty arrangements.

Step 5 — Assess effects

Consider effects on:

• price;
• quality;
• innovation;
• privacy;
• consumer choice;
• entry;
• investment;
• interoperability;
• technological neutrality.

6. Ex Ante and Ex Post Governance

Ex Post Competition Law

Traditional competition law addresses conduct after investigation.

Examples:

• Article 102 TFEU;
• Section 2 Sherman Act;
• Indian Competition Act, 2002;
• merger-control provisions.

Ex Ante Governance

Connected digital ecosystems increasingly justify rules imposed before a conventional antitrust infringement has fully materialised.

The EU DMA is a prominent example.

Its interoperability framework requires designated gatekeepers to provide third parties with access to certain OS hardware and software features available to the gatekeeper's own services.

In 2026, the European Commission issued binding specification measures concerning Google's Android interoperability for competing AI services and access to certain Google Search data.

7. Data Portability as a Competition Remedy

Data portability can reduce ecosystem lock-in.

A consumer who can transfer:

data + preferences + contacts + content + device information

between competing ecosystems faces lower switching costs.

The EU DMA specifically addresses data portability, and the Commission has identified cross-platform device-data transfer as an important part of mobile ecosystem contestability.

8. API Governance

APIs can become a competitive bottleneck.

An ecosystem owner might provide its own products with:

• superior API access;
• earlier access;
• more functionality;
• higher data limits; or
• privileged technical permissions.

Competition governance may therefore require:

• transparent API access;
• non-discrimination;
• reasonable technical conditions;
• security safeguards;
• documentation;
• auditability.

The challenge is balancing interoperability against legitimate cybersecurity and system-integrity requirements. The DMA itself recognises that gatekeepers can adopt necessary and proportionate security measures where properly justified.

9. Connected Devices and IoT

IoT creates particularly complex competition questions.

A typical IoT ecosystem may contain:

Device → connectivity → operating system → cloud → data → analytics → marketplace → complementary services

A dominant undertaking at one layer can potentially influence several other layers.

Examples include:

• smart speakers;
• smart thermostats;
• wearable devices;
• connected cars;
• industrial sensors;
• medical devices;
• smart meters;
• agricultural machinery.

Competition law should therefore examine vertical technological dependencies.

10. Connected Vehicles

Connected vehicles combine:

• vehicle hardware;
• software;
• navigation;
• cloud services;
• charging;
• insurance;
• repair;
• data;
• entertainment; and
• autonomous-driving systems.

Potential competition issues include:

A. Vehicle-data access

A manufacturer could potentially control data necessary for competing repair, insurance or mobility services.

B. Charging interoperability

Restrictions connecting vehicles to competing charging infrastructure can create ecosystem lock-in.

C. App-store control

Vehicle operating systems may become gateways for applications and services.

D. Repair markets

Exclusive access to diagnostic information could affect independent repairers.

11. Cloud and Connected Ecosystems

Cloud computing can function as infrastructure for multiple downstream businesses.

Competition concerns may involve:

• cloud switching costs;
• data portability;
• interoperability;
• preferential treatment of affiliated services;
• technical migration barriers;
• cloud credits;
• licensing restrictions.

The EU's 2026 preliminary position concerning AWS and Microsoft Azure illustrates the increasing regulatory focus on cloud services as important gateways between businesses and customers, including concerns relating to lock-in, switching costs and ecosystem effects.

12. Remedies

Competition authorities may use several remedies.

Structural remedies

• divestiture;
• separation of business units;
• prohibition of acquisitions.

Behavioural remedies

• interoperability;
• API access;
• non-discrimination;
• data portability;
• prohibition of tying;
• prohibition of self-preferencing.

Technical remedies

• open standards;
• common interfaces;
• interoperability protocols;
• portability tools;
• access monitoring.

Procedural remedies

• independent compliance monitors;
• periodic reporting;
• technical audits;
• complaint mechanisms;
• regulatory access to documentation.

13. Competition Law and Standards

Connected environments depend heavily upon technical standards.

Standards can promote competition by making different products compatible.

However, standard-setting can also create risks of:

• exclusionary standards;
• discriminatory participation;
• patent hold-up;
• coordinated exclusion;
• refusal to license;
• discriminatory certification.

Consequently, competition authorities must distinguish between legitimate technical standardisation and standardisation that is used strategically to exclude competitors.

14. Competition, Privacy and Security

Connected environments create an important three-way relationship:

Competition ↔ Privacy ↔ Cybersecurity

A requirement to share data or provide interoperability cannot ignore:

• personal-data protection;
• cybersecurity;
• system integrity;
• confidentiality;
• authentication;
• consumer safety.

At the same time, privacy or security should not automatically become a pretext for excluding competitors.

The EU's 2026 Android interoperability measures demonstrate this balancing exercise: the Commission's framework allows security and data-protection considerations while requiring meaningful access for competing services.

15. Indian Competition-Law Perspective

In India, connected environments can be examined principally under the Competition Act, 2002, particularly:

• Section 3 — anti-competitive agreements;
• Section 4 — abuse of dominant position;
• Sections 5 and 6 — combinations;
• CCI investigative powers; and
• competition advocacy.

Potential Indian connected-environment disputes could involve:

• digital platforms;
• telecom ecosystems;
• UPI and payment interfaces;
• app stores;
• e-commerce;
• cloud services;
• smart-device ecosystems;
• EV charging;
• connected vehicles;
• digital healthcare;
• IoT infrastructure.

The Indian framework can therefore address both conduct-based antitrust problems and ecosystem-level merger concerns.

16. Key Legal Tests

A connected-environment competition inquiry should ask:

17. Six Core Principles of Competition Governance

Principle 1 — Contestability

A connected ecosystem should remain open enough for competitors to challenge incumbents.

Principle 2 — Interoperability

Technical compatibility should not unnecessarily become a competitive bottleneck.

Principle 3 — Portability

Users should be able to transfer important data and services where legally and technically appropriate.

Principle 4 — Non-discrimination

An ecosystem operator should not unjustifiably provide its own downstream services with privileged access.

Principle 5 — Ecosystem neutrality

Competition authorities should consider competitive effects across interconnected technological layers.

Principle 6 — Innovation protection

Competition governance should preserve incentives to invest in new technologies while preventing exclusionary control over essential technological gateways.

18. Emerging Issues

Connected environments are increasingly converging with:

• artificial intelligence;
• autonomous agents;
• cloud computing;
• robotics;
• smart cities;
• digital twins;
• connected vehicles;
• blockchain;
• industrial IoT;
• 5G/6G;
• quantum networking;
• wearable computing.

The competition question may therefore move from:

Who dominates a market?

toward:

Who controls the infrastructure through which multiple markets operate?

This is why contemporary competition governance increasingly examines ecosystems, interoperability, data access, switching costs and technological dependencies rather than relying exclusively on conventional product-market analysis.

19. Conclusion

Competition law in connected environments must address a fundamental structural problem: interconnection can create enormous efficiencies, but the same interconnection can produce dependency and lock-in.

The major cases—Microsoft, Google Android, Google Shopping, Apple App Store, Qualcomm and Samsung—demonstrate different dimensions of this problem:

• interoperability;
• tying;
• self-preferencing;
• platform access;
• vertical leverage;
• standards;
• intellectual property;
• network effects; and
• ecosystem control.

The emerging governance model therefore combines traditional antitrust with interoperability, data portability, technical access, merger scrutiny and ex ante digital regulation.