Competition Law and Ecosystem Dependency Governance Frameworks

1. Meaning

Ecosystem dependency governance is a competition-law framework for analysing situations where businesses or consumers become significantly dependent on a powerful digital, technological, commercial, or infrastructure ecosystem.

Examples include dependence on:

an app store;

operating system;

cloud infrastructure;

online marketplace;

search engine;

payment system;

advertising platform;

digital identity system;

enterprise software;

AI infrastructure;

data infrastructure.

The European Commission itself identifies network effects, economies of scale, user lock-in, business-user dependence and vertical integration as factors that can undermine contestability in digital markets. (Digital Markets Act (DMA))

Simple definition

Ecosystem dependency governance means designing competition rules so that dependence on a powerful ecosystem does not become a mechanism for excluding competitors, exploiting business users, or permanently reducing market contestability.

2. Why Ecosystem Dependency Matters

Traditional competition law often asks:

“Is the undertaking dominant, and has it abused that dominance?”

Ecosystem dependency adds another question:

“How dependent are other market participants on the ecosystem, and can the ecosystem owner use that dependency to control competitive conditions?”

For example:

Cloud provider

↓

Business becomes dependent on infrastructure

↓

Data + software + customers accumulate

↓

Switching becomes expensive

↓

Business cannot easily migrate

↓

Cloud provider obtains greater bargaining power

This creates a potential dependency cycle.

3. Dependency Cycle

A typical digital ecosystem may operate as follows:

Large user base

↓

Network effects

↓

More business users

↓

More data

↓

Better ecosystem services

↓

Higher switching costs

↓

Greater dependency

↓

More ecosystem power

↓

Greater ability to impose rules

↓

Further dependency

This is why ecosystem dependency is closely connected with market power and contestability.

The EU's DMA review describes contestability as the ability of firms to overcome barriers to entry and expansion and challenge gatekeepers on the merits. It also links reduced contestability with the ability of gatekeepers to impose unfair practices. (Digital Markets Act (DMA))

4. Main Elements of Ecosystem Dependency

A. Network Effects

The value of a platform may increase as more people use it.

Example:

More users → more developers → more applications → more users.

Network effects can create substantial entry barriers.

B. Switching Costs

A business may remain with an ecosystem because leaving would require:

transferring data;

retraining employees;

rebuilding integrations;

changing software;

finding new customers;

changing payment systems;

rewriting APIs.

Therefore:

The ability to leave the ecosystem may exist formally but not realistically.

5. C. Data Dependency

Businesses may depend upon ecosystem-controlled data.

Examples:

customer analytics;

search data;

advertising data;

transaction information;

behavioural information;

platform-generated performance data.

If the ecosystem owner controls essential information while simultaneously competing with the dependent business, competition concerns may arise.

6. D. Technical Dependency

Dependency can arise through:

APIs;

operating systems;

proprietary standards;

cloud architecture;

software formats;

authentication systems;

app-store infrastructure.

Technical dependency is especially significant where competing infrastructure is difficult or expensive to develop.

7. E. Distribution Dependency

A business may technically have a product but still depend on an ecosystem to reach consumers.

For example:

Developer

→ App Store

→ Consumer

or:

Seller

→ Marketplace

→ Consumer.

The ecosystem therefore controls the distribution gateway.

8. F. Ranking Dependency

Businesses may depend upon:

search ranking;

marketplace ranking;

recommendation algorithms;

app-store visibility;

advertising placement.

A change in ranking can substantially change the business's ability to obtain customers.

The Google Shopping litigation is particularly relevant because the Court of Justice upheld findings concerning Google's favourable treatment of its own comparison-shopping service in general search results. (curia)

9. G. Payment Dependency

A business may depend upon the ecosystem's:

payment infrastructure;

billing system;

transaction processing;

digital wallet.

Restrictions on alternative payment systems can increase dependency.

This is one reason modern digital regulation includes rules concerning alternative distribution and payment channels. The DMA framework covers, among other matters, data access, interoperability and alternative distribution channels. (Digital Markets Act (DMA))

10. H. Contractual Dependency

Dependency may also result from contracts.

Examples:

exclusivity;

minimum purchase requirements;

anti-steering clauses;

loyalty rebates;

long-term commitments;

restrictions on multi-homing.

The important question is not simply whether a contract exists.

It is:

Does the contractual structure make meaningful switching or multi-homing difficult?

11. Ecosystem Dependency Governance Framework

A useful framework can be divided into 8 stages.

Stage 1 — Identify the ecosystem

Determine:

platform;

infrastructure;

complementary services;

users;

business users;

competitors.

Stage 2 — Identify dependency

Ask:

Who depends on whom?

Stage 3 — Measure dependency

Consider:

switching costs;

network effects;

data;

interoperability;

market alternatives;

contractual restrictions.

Stage 4 — Identify the bottleneck

What does the ecosystem control?

Examples:

API;

data;

distribution;

payment;

ranking;

operating system.

Stage 5 — Identify the conduct

Look for:

exclusion;

discrimination;

tying;

self-preferencing;

refusal to supply;

exclusive dealing;

loyalty incentives.

Stage 6 — Assess effects

Does the conduct:

foreclose rivals?

raise rivals' costs?

reduce innovation?

increase lock-in?

reduce choice?

prevent entry?

Stage 7 — Examine justification

Consider:

security;

privacy;

technical integrity;

efficiency;

consumer protection.

Stage 8 — Select remedy

Possible remedies include:

interoperability;

access;

non-discrimination;

data portability;

removal of exclusivity;

alternative payment access;

transparency;

behavioural commitments;

structural remedies in exceptional circumstances.

12. Ecosystem Dependency and Dominance

Dependency does not automatically mean dominance.

A business can be dependent on another company for legitimate commercial reasons.

Competition concerns become stronger where:

Dependency + substantial market power + exclusionary conduct

occur together.

The classic starting point is United Brands, where the Court examined relevant-market conditions and the concept of dominant position under Article 86 of the EEC Treaty. (Infocuria)

Formula

Dependency ≠ automatic abuse

but:

Dominance + dependency + exclusionary conduct = potential abuse-of-dominance issue.

13. Important Case Laws

1. United Brands v Commission — Case 27/76

Principle

The Court addressed:

relevant-market definition;

dominant position;

market power;

refusal to supply;

discriminatory conduct.

(Infocuria)

Ecosystem relevance

United Brands provides the traditional foundation for asking whether an ecosystem possesses enough economic power to behave with substantial independence from competitors and customers.

Revision point

United Brands = dominance + market power.

14. Commercial Solvents — Joined Cases 6/73 and 7/73

Principle

The case concerned a dominant undertaking's control over an upstream input and conduct affecting downstream competitors.

Ecosystem relevance

It is useful for analysing:

Infrastructure dependency + downstream competition.

Suppose an ecosystem controls an essential technological input and also competes downstream.

Restricting the input may potentially disadvantage downstream competitors.

Revision point

Commercial Solvents = upstream control → downstream foreclosure.

15. Bronner v Mediaprint — Case C-7/97

Principle

The Court considered whether a dominant newspaper undertaking had to provide a rival access to its newspaper home-delivery network.

The case is a major authority concerning refusal to supply and essential facilities. (Infocuria)

Ecosystem relevance

It establishes an important limitation:

A powerful ecosystem is not automatically required to provide every competitor with access to every facility.

The stringent conditions associated with the essential-facilities doctrine are therefore important.

Revision point

Bronner = dependency does not automatically create an access right.

16. Microsoft v Commission — Case T-201/04

Principle

Microsoft concerned, among other matters:

refusal to supply interoperability information;

interoperability;

tying;

operating-system dominance;

downstream competition.

The General Court's judgment expressly addressed Microsoft's refusal to supply interoperability information and the bundling of its operating system with its media player. (Infocuria)

Ecosystem relevance

This is a fundamental ecosystem-dependency case.

The structure was broadly:

Operating system

↓

Technical interoperability

↓

Server software

↓

Downstream competition

Control over the central technical layer created dependency for surrounding businesses.

Revision point

Microsoft = interoperability + technological dependency.

17. Google Android — Case T-604/18

Principle

The General Court's Android judgment expressly considered:

multi-sided platforms;

the concept of an ecosystem;

Android;

Play Store;

Google Search;

Chrome;

device manufacturers;

mobile-network operators;

product bundling;

exclusivity payments;

anti-fragmentation obligations;

exclusionary effects. (Infocuria)

Ecosystem relevance

Android demonstrates how dependency can operate across several connected layers:

Android

→ Play Store

→ Search

→ Browser

→ Applications

→ Users

A restriction imposed at one layer can affect competitive conditions elsewhere.

Revision point

Google Android = ecosystem-wide leveraging.

18. Google Shopping — Case C-48/22 P

Principle

In its 10 September 2024 judgment, the Court of Justice dismissed Google's appeal concerning the Commission's finding of abuse involving preferential display of Google's own comparison-shopping service. (Infocuria)

Ecosystem relevance

Search is a major discovery gateway.

A competing business may technically remain available but become commercially dependent on search visibility.

Therefore:

Search ranking

→ visibility

→ traffic

→ customers

→ business survival

This illustrates distribution dependency.

Revision point

Google Shopping = ranking + self-preferencing + discovery dependency.

19. Intel v Commission — Case C-413/14 P

Principle

Intel is important for analysing exclusionary rebates and the economic ability of conditional rebates to foreclose competitors.

The underlying conduct included rebates and payments conditional on purchasing all or nearly all relevant CPUs from Intel, with effects on competitors' ability to compete on the merits. (curia)

Ecosystem relevance

A powerful ecosystem can use economic incentives to increase dependency.

For example:

Platform access

financial incentive

exclusivity

↓

reduced multi-homing

↓

greater dependency

Revision point

Intel = incentives can strengthen dependency and foreclosure.

20. Tetra Pak II — Case C-333/94 P

Principle

Tetra Pak II is a major authority concerning abuse of dominance and conduct linking adjacent markets, particularly tying and leveraging.

Ecosystem relevance

Modern ecosystems frequently connect:

hardware;

software;

cloud;

payment;

advertising;

data.

The ecosystem operator may therefore attempt to transfer power from one layer to another.

Revision point

Tetra Pak II = leveraging power across connected markets.

21. Eturas — Case C-74/14

Principle

Eturas concerned an electronic booking platform and the possibility of concerted conduct being communicated through a common electronic system.

Ecosystem relevance

It demonstrates that digital architecture can become an environment through which independent businesses coordinate.

Thus, ecosystem governance has two dimensions:

Dependency problem

and

Coordination problem.

Revision point

Eturas = digital platform + coordinated conduct.

22. Case-Law Table

23. Dependency Governance Model

A practical competition-policy model can be expressed as:

D = P + A + S + N + C

Where:

D = Dependency

P = Platform/infrastructure power

A = Access control

S = Switching costs

N = Network effects

C = Contractual constraints

The higher these factors become, the more carefully competition authorities may need to examine ecosystem conduct.

This is an analytical framework, not a statutory formula.

24. Dependency vs Lock-In

These concepts are related but different.

Dependency

A business substantially relies on the ecosystem.

Lock-in

Leaving the ecosystem is particularly difficult or costly.

Example

A company uses a cloud platform.

If it can easily move its:

data;

applications;

customers;

integrations

to another provider, dependency may be limited.

If migration requires substantial reconstruction, dependency can become lock-in.

25. Multi-Homing as a Governance Tool

Multi-homing means using more than one platform.

Example:

A seller simultaneously uses:

Marketplace A;

Marketplace B;

its own website.

Multi-homing can reduce ecosystem dependency.

Therefore competition policy may examine whether an ecosystem prevents or discourages multi-homing.

Possible restrictions include:

exclusivity;

anti-steering provisions;

technical incompatibility;

loyalty discounts;

contractual restrictions.

26. Interoperability as an Anti-Dependency Mechanism

Interoperability allows competing systems to communicate.

Example:

Platform A ↔ Platform B

instead of:

Platform A → users permanently locked inside A.

The DMA specifically identifies interoperability as a regulatory tool, and the Commission describes gatekeeper power as being reinforced by network effects, lock-in and resulting business-user dependence. (Digital Markets Act (DMA))

27. Data Portability as an Anti-Dependency Mechanism

Data portability allows users or businesses to take their information elsewhere.

This can reduce:

Data lock-in.

However, portability alone may not eliminate dependency where:

software is proprietary;

APIs are incompatible;

customers remain tied to the ecosystem;

employees require specialised training.

Therefore:

Data portability ≠ complete interoperability.

28. FRAND and Non-Discrimination

Where access is legally required, governance may involve:

Fair, Reasonable and Non-Discriminatory (FRAND) conditions.

The current DMA framework includes obligations concerning FRAND access in specified circumstances. (Digital Markets Act (DMA))

The purpose is to prevent the ecosystem owner from saying:

“I provide access, but I give favourable conditions to my own business and substantially worse conditions to competitors.”

29. Dependency and Self-Preferencing

The risk is particularly strong when the ecosystem owner is both:

Gatekeeper

and

Competitor.

Example:

Marketplace controls seller visibility

Marketplace sells its own products

↓

Potential conflict of interest.

Similarly:

Search engine controls ranking

Search engine operates specialised search service

↓

Potential self-preferencing concern.

Google Shopping provides the leading modern EU example. (Infocuria)

30. Dependency and Ecosystem Governance

A governance framework should therefore address:

1. Access

Can competitors reach the ecosystem?

2. Interoperability

Can competing systems communicate?

3. Data

Can business users access relevant data?

4. Ranking

Are competitors treated fairly?

5. Payment

Can alternative payment systems operate?

6. Contract

Are exclusivity and anti-steering restrictions justified?

7. Switching

Can businesses realistically leave?

8. Appeals

Can affected businesses challenge ecosystem decisions?

31. Ex-Ante Governance

Traditional competition law generally intervenes after suspected anti-competitive conduct.

Modern digital regulation increasingly uses ex-ante governance.

The EU DMA is the clearest example. It establishes objective gatekeeper criteria and specific obligations and prohibitions for designated core platform services, while remaining complementary to EU competition law. (Digital Markets Act (DMA))

The Commission's 2026 review identifies continuing work concerning cloud services and AI, including issues concerning interoperability, defaults and access to search data. (Digital Markets Act (DMA))

32. Ex-Post Competition Law

Ex-post enforcement remains important.

Authorities can investigate whether particular conduct constitutes:

abuse of dominance;

exclusionary conduct;

tying;

refusal to deal;

discriminatory treatment;

exclusive dealing;

anti-competitive rebates.

Thus:

Ex-ante ecosystem governance and ex-post competition law are complementary rather than mutually exclusive.

The Commission expressly describes the DMA as complementing, rather than replacing, EU competition rules. (Digital Markets Act (DMA))

33. Dependency Governance and Remedies

Behavioural remedies

Examples:

prohibit discrimination;

require access;

change ranking rules;

remove exclusivity;

allow alternative payments.

Technical remedies

Examples:

APIs;

interoperability;

data portability;

technical standards.

Structural remedies

In exceptional circumstances:

separation of business units;

divestiture;

limits on vertical integration.

Structural remedies are generally much more intrusive and require a stronger legal and evidentiary foundation.

34. Key Governance Principle

The central idea can be expressed as:

Competition policy should prevent legitimate ecosystem integration from becoming an instrument of irreversible dependency.

This does not mean every dependency is unlawful.

Dependency may result naturally from:

superior technology;

economies of scale;

efficiency;

innovation;

consumer preference.

The competition concern arises when market power and strategic conduct transform dependency into exclusionary or exploitative conditions.

35. Ultra-Basic Exam Formula

Ecosystem Dependency

Network Effects

Switching Costs

Data Control

Infrastructure Control

Distribution Control

Contractual Restrictions

↓

Business/User Dependency

↓

Potential Market Power

↓

Check:

Exclusion + Foreclosure + Discrimination + Lock-in

↓

Competition-Law Intervention

36. Exam Revision Checklist

Remember these 10 keywords:

Dependency

Gatekeeper

Lock-in

Network effects

Switching costs

Interoperability

Data portability

Self-preferencing

Foreclosure

Contestability

Six essential cases

United Brands → dominance

Bronner → refusal/access

Microsoft → interoperability

Google Android → ecosystem leveraging

Google Shopping → self-preferencing

Intel → exclusionary incentives

Additional cases:

Commercial Solvents → downstream foreclosure

Tetra Pak II → cross-market leveraging

Eturas → digital coordination

One-Line Revision Rule

Ecosystem dependency governance in competition law seeks to preserve contestability by preventing powerful ecosystem operators from converting network effects, lock-in, infrastructure control, data, contractual restrictions and distribution gateways into mechanisms for unjustified exclusion or foreclosure of dependent businesses and competitors.