Competition Law and Ecosystem Dependency Indexes

1. Meaning

An Ecosystem Dependency Index (EDI) is a conceptual competition-law tool used to measure how strongly businesses, consumers, developers, suppliers, or complementary services depend on a particular firm, platform, infrastructure, technology, or ecosystem.

It is particularly useful in digital and platform markets where ordinary market-share analysis may not fully capture economic power.

For example:

Operating System → App Developers → Users → Data → Advertising → Payments → Cloud Services

If many participants depend on one central platform and cannot easily switch to alternatives, the platform may possess significant ecosystem power.

Important: An EDI is not itself a statutory UAE legal test. It is an analytical framework that can help investigate market power, barriers to entry, switching costs, foreclosure and dependence.

2. Why Ecosystem Dependency Matters

Traditional competition analysis often examines:

market share;

prices;

competitors;

barriers to entry;

consumer demand.

In digital ecosystems, additional questions become important:

How dependent are users on the platform?

How difficult is switching?

Can suppliers reach customers without the platform?

Are there alternative infrastructures?

Does the platform control essential data?

Are complementary businesses dependent on its rules?

Does the platform control access to customers?

Can the platform use power in one market to affect another?

Therefore:

Market Share + Ecosystem Dependency + Switching Costs + Network Effects + Gateway Control = Better Market-Power Analysis

But dependency alone does not establish an infringement.

3. UAE Competition-Law Framework

The principal current UAE statute is Federal Decree-Law No. 36 of 2023 Regarding Regulating Competition. The official legislation records the law as current, with its implementation supported by the 2026 Executive Regulations. (UAE Legislation)

The UAE framework addresses, among other things:

restrictive agreements;

abuse of dominant position;

economic concentration;

relevant markets;

competitive effects.

The 2025 UAE threshold resolution provides that a dominant position is established where an undertaking's share in the relevant market exceeds 40%, subject to the statutory framework and applicable analysis. (UAE Legislation)

The important point for ecosystem dependency is that:

Dependency is evidence that may help explain market power; it is not automatically equivalent to dominance.

For example, a company could have a highly interconnected ecosystem but still face substantial competition and easy switching.

4. Components of an Ecosystem Dependency Index

A conceptual EDI can contain several variables.

A. User Dependency

Measures how heavily customers rely on the ecosystem.

Examples:

percentage of users using the ecosystem daily;

percentage of transactions conducted through it;

dependence on ecosystem-specific services.

B. Switching-Cost Dependency

Measures the difficulty of moving elsewhere.

Factors include:

financial switching costs;

loss of accumulated data;

loss of contacts;

learning costs;

contractual restrictions;

loss of reputation or ratings;

incompatibility.

C. Supplier Dependency

Measures how dependent suppliers are on the platform.

For example:

Seller → Marketplace → Customers

If the seller cannot economically reach customers without the marketplace, dependency increases.

D. Data Dependency

Measures whether participants depend upon access to:

customer data;

transaction data;

behavioural information;

analytics;

APIs;

technical infrastructure.

E. Network-Effect Dependency

A platform becomes more valuable as more people use it.

Example:

More users → more developers → more applications → more users

This can make entry difficult even where prices are low or zero.

The Microsoft litigation illustrates the importance of network effects and the “applications barrier to entry.” (Justice.gov)

F. Gateway Dependency

This asks:

Can the ecosystem operator control access to customers or complementary markets?

Examples:

search engine;

app store;

payment system;

operating system;

online marketplace;

cloud infrastructure.

Gateway dependency is particularly important when the platform can favour its own services.

G. Interoperability Dependency

Measures whether businesses can operate independently of the ecosystem.

Low interoperability can increase dependency.

Examples:

proprietary APIs;

incompatible software;

closed payment systems;

platform-specific technical standards.

5. Illustrative EDI Formula

There is no official UAE statutory formula called the Ecosystem Dependency Index.

For academic analysis, a hypothetical index could be:

EDI=w1U+w2S+w3D+w4N+w5G+w6IEDI = w_1U+w_2S+w_3D+w_4N+w_5G+w_6I

Where:

U = user dependency

S = switching-cost dependency

D = data dependency

N = network-effect dependency

G = gateway dependency

I = interoperability dependency

The weights w1w_1 to w6w_6 would depend upon the particular investigation.

Example

Suppose:

A high conceptual EDI would indicate strong ecosystem dependence.

It would not, by itself, prove abuse.

6. EDI and Dominance Are Different

Key formula

Dependency ≠ Dominance ≠ Abuse

This distinction is extremely important in an examination answer.

7. EDI and Market Share

Market share remains important.

However:

High market share + low dependency can produce a different competitive situation from high market share + very high dependency.

For example:

Situation A

A platform has 50% market share, but:

users can switch easily;

data can be transferred;

several alternative platforms exist;

suppliers can multi-home.

Dependency may be relatively limited.

Situation B

A platform has 50% market share and:

very high switching costs;

proprietary data;

strong network effects;

exclusive technical infrastructure;

limited alternatives.

The ecosystem may provide stronger evidence of durable market power.

8. At Least 6 Important Case Laws

The following are comparative competition-law authorities, mainly from the EU and United States. They are useful for understanding ecosystem dependency but are not binding UAE precedents.

Case 1: United States v. Microsoft Corp.

253 F.3d 34 (D.C. Cir. 2001)

Facts

Microsoft had very substantial power in Intel-compatible PC operating systems. The case examined Microsoft's conduct concerning Internet browsers and competing technologies.

Principle

The court considered the importance of:

network effects;

applications barriers;

installed user base;

technological dependency;

barriers to entry.

The DOJ's materials describe the applications barrier as an important mechanism protecting Microsoft's operating-system position. (Justice.gov)

EDI relevance

This is one of the strongest illustrations of:

User base → developer dependency → applications → stronger user base

Therefore:

Network dependency can reinforce market power.

Case 2: Google and Alphabet v Commission — Google Shopping

C-48/22 P

Facts

Google was found to have favoured its own comparison-shopping service within general search results.

The case concerned the relationship between:

general search;

comparison shopping;

visibility;

traffic;

competing services.

The Court's materials describe the allegation and findings concerning Google's favourable treatment of its own comparison-shopping service. (curia)

EDI relevance

Google's search engine operated as a gateway to other services.

Therefore:

Gateway dependency → traffic dependency → competitive dependency

This demonstrates why an ecosystem analysis may look beyond simple market shares.

Case 3: Bronner v Mediaprint

C-7/97

Facts

A newspaper publisher sought access to another newspaper group's home-delivery system.

Principle

The Court considered when refusal of access by a dominant undertaking could constitute abuse.

The Court applied a demanding test concerning circumstances such as whether access was indispensable and whether duplication was realistically possible. (Infocuria)

EDI relevance

This case illustrates:

Infrastructure dependency is not automatically a legal right of access.

A high dependency score must therefore be accompanied by a proper legal analysis of indispensability and competitive effects.

Case 4: Coty Germany v Parfümerie Akzente

C-230/16

Facts

Coty operated a selective distribution system for luxury cosmetics and restricted visible sales through certain third-party online platforms.

Holding

The CJEU held that, under the circumstances, such a clause could be compatible with EU competition law where it pursued the legitimate objective of preserving the luxury image, was applied uniformly and without discrimination, and was proportionate. (Infocuria)

EDI relevance

This demonstrates that:

Platform dependency ≠ automatic prohibition of platform restrictions.

Competition analysis must consider:

purpose;

proportionality;

market structure;

alternatives;

competitive effects.

Case 5: Intel v Commission

C-413/14 P

Facts

Intel's rebate practices were examined in relation to possible exclusion of competitors.

Principle

The Court emphasised the importance of examining the capability of the conduct to produce exclusionary effects where the relevant economic circumstances and evidence require that analysis.

EDI relevance

Dependency analysis should therefore examine:

customer dependence;

duration;

coverage;

rival access;

foreclosure capability;

actual economic effects.

It should not simply say:

“Customers depend on the platform, therefore abuse exists.”

Instead:

Dependency → conduct → foreclosure capability → competitive effect

Case 6: Ohio v. American Express Co.

585 U.S. 529 (2018)

Facts

The case concerned American Express's anti-steering provisions and the structure of its payment platform.

Principle

The U.S. Supreme Court treated credit-card transactions as involving a two-sided platform, requiring analysis of both sides of the platform in the particular case.

EDI relevance

It demonstrates that ecosystem dependency may operate on multiple sides:

Cardholders ↔ Payment platform ↔ Merchants

A platform's competitive effects cannot always be understood by looking at only one participant group.

Case 7: Pierre Fabre Dermo-Cosmétique

C-439/09

Facts

Pierre Fabre's selective distribution arrangements effectively prevented distributors from selling products through the internet.

Principle

The CJEU treated the relevant online-sales restriction as a serious restriction under EU competition law.

EDI relevance

It shows how restrictions on an important distribution channel can increase:

distributor dependency;

consumer access dependency;

platform/channel dependency.

It also provides useful comparison with the later Coty decision.

Case 8: IMS Health v NDC Health

C-418/01

Facts

The dispute concerned access to a pharmaceutical sales-data structure protected by intellectual property.

Principle

The Court applied stringent conditions before compulsory access could be required.

EDI relevance

This is particularly important for:

Data dependency + infrastructure dependency + interoperability

A company may depend heavily on a particular data architecture without that automatically creating a legal obligation to provide access.

9. Ecosystem Dependency and Network Effects

Network effects are central to EDI analysis.

Positive feedback loop

More users

↓

More complementary businesses

↓

More products/services

↓

Greater ecosystem attractiveness

↓

More users

This can create a dependency loop.

The Microsoft materials specifically describe how network effects can make displacement of an established platform difficult. (Justice.gov)

10. Ecosystem Dependency and Switching Costs

Switching costs are particularly important.

Consider:

Platform A → 10 years of data → customer reviews → software integrations → payment history → trained employees

Moving to Platform B may require:

data migration;

retraining;

new contracts;

rebuilding reputation;

changing APIs;

losing customers;

duplicate infrastructure.

Therefore:

High switching cost → high dependency → potentially greater entry barrier

But again, this is evidence rather than an automatic legal conclusion.

11. Ecosystem Dependency and Multi-Homing

Multi-homing means using more than one platform.

Example:

A seller simultaneously uses:

Platform A;

Platform B;

its own website.

Multi-homing can reduce dependency.

Comparison

12. Ecosystem Dependency and Foreclosure

The important competition-law question is:

Can ecosystem dependency be used to exclude competitors?

Possible mechanisms include:

1. Self-preferencing

Platform favours its own downstream service.

2. Exclusive dealing

Customers/suppliers are prevented from using rivals.

3. Tying

Access to one service requires purchasing another.

4. Bundling

Multiple ecosystem services are supplied together.

5. Interoperability restrictions

Rivals cannot properly connect.

6. Data restrictions

Competitors cannot access necessary data.

7. Access restrictions

The platform controls entry into an important ecosystem.

13. Ecosystem Dependency Index — Legal Analytical Chain

A useful competition-law framework is:

Ecosystem

↓

Participant Dependency

↓

Switching Costs / Network Effects

↓

Gateway or Infrastructure Control

↓

Market Power

↓

Conduct

↓

Foreclosure Capability

↓

Actual/Potential Competitive Effects

↓

Efficiency/Objective Justification

↓

Legal Conclusion

This is much safer than treating the index itself as the legal test.

14. Practical EDI Indicators

A competition authority could conceptually examine:

Structural indicators

market share;

number of alternatives;

concentration;

network effects.

Dependency indicators

percentage of customers dependent;

percentage of suppliers dependent;

platform transaction share;

data dependency.

Switching indicators

migration cost;

time required to switch;

contractual restrictions;

technical compatibility.

Gateway indicators

access control;

ranking control;

app-store control;

payment control;

search visibility.

Behavioural indicators

exclusivity;

tying;

self-preferencing;

discrimination;

refusal to deal.

Outcome indicators

rival exit;

reduced innovation;

reduced choice;

higher fees;

reduced quality;

reduced investment.

15. EDI Does Not Automatically Mean Anticompetitive Conduct

This is a crucial exam point.

A strong ecosystem may produce legitimate efficiencies.

For example:

integrated payment systems;

common security standards;

unified customer support;

interoperability improvements;

lower transaction costs;

better product quality;

innovation;

economies of scale.

Therefore:

Strong dependency can be economically efficient.

Competition law generally becomes concerned when dependency is connected to legally prohibited conduct and harmful competitive effects.

16. Ecosystem Dependency vs Economic Dependence

These concepts overlap but are different.

17. Ecosystem Dependency vs Dominance

Dependency asks:

“How much does participant X rely upon ecosystem Y?”

Dominance asks:

“Does undertaking X possess substantial market power under the applicable competition-law framework?”

Abuse asks:

“Has the undertaking used that position through prohibited conduct?”

Thus:

Dependency → Evidence

Dominance → Legal status

Abuse → Conduct + competitive effects

18. Simple Example

Suppose Platform X controls 60% of an online marketplace.

Sellers depend upon X because:

80% of their customers come from X;

seller ratings cannot easily be transferred;

advertising operates inside X;

logistics are integrated with X;

switching costs are high;

sellers cannot easily reach customers elsewhere.

An EDI could therefore be high.

But the legal analysis must continue:

Question 1

Is X dominant in the relevant market?

Question 2

What conduct is X engaging in?

Question 3

Is X favouring its own products?

Question 4

Is X imposing exclusivity?

Question 5

Is X restricting interoperability?

Question 6

Does the conduct foreclose competitors?

Question 7

Are there objective efficiencies or justifications?

Only then can competition-law liability be assessed.

19. Key Case-Law Lessons

20. Exam-Ready Answer

Ecosystem Dependency Indexes are analytical measures used to evaluate the degree to which consumers, suppliers, developers or complementary businesses depend upon a particular digital or economic ecosystem. They may consider user dependency, switching costs, network effects, data dependency, gateway control, interoperability and supplier dependence.

Under UAE competition law, ecosystem dependency is not itself an independent statutory infringement or a substitute for the legal assessment of dominance and abuse. Federal Decree-Law No. 36 of 2023 provides the principal competition framework, while the current implementing framework includes the 2026 Executive Regulations. (UAE Legislation)

Comparative authorities such as United States v Microsoft, Google Shopping, Bronner, Coty, Intel, Ohio v American Express, Pierre Fabre and IMS Health demonstrate why dependency, network effects, gateway control, switching costs and infrastructure access can be relevant to competition analysis. The proper approach is to move from dependency to market power, then examine conduct and its actual or potential competitive effects.

21. Ultra-Short Revision Formula

EDI Formula

User Dependency + Switching Costs + Network Effects + Data Dependency + Gateway Control + Infrastructure Dependency

↓

Ecosystem Power

↓

Market Power Analysis

↓

Conduct

↓

Foreclosure / Competitive Effects

↓

Efficiency + Justification

↓

Competition-Law Conclusion

One-line memory rule:

“Dependency is evidence of ecosystem power, not automatic proof of dominance or abuse.”