Competition Law and Future Oversight of Context-Driven Competition

1. Introduction

Context-driven competition refers to a competition environment in which competitive conditions cannot be assessed solely by looking at conventional market shares, prices, or a static definition of the relevant market. Instead, competitive effects depend upon the context in which firms interact, including technology, data, network effects, ecosystems, switching costs, interoperability, consumer behaviour, regulation, geographic conditions, innovation, and the particular position of the undertaking within a value chain.

This approach is increasingly important in digital and technology-intensive markets. The same conduct may have very different competitive consequences depending on whether it occurs in a fragmented market, a highly concentrated platform ecosystem, a zero-price service, an after-market, or a market characterised by strong network effects.

Recent EU competition-law materials expressly recognise the relevance of network effects, single- and multi-homing, ecosystems, aftermarkets and interconnected markets when assessing market power.

2. Meaning of Context-Driven Competition

Traditional competition analysis often asks:

What is the relevant market, who are the competitors, and what is the market share?

Context-driven competition asks a broader series of questions:

1. Who controls the relevant gateway?
2. What network effects exist?
3. Can users realistically switch?
4. Do consumers multi-home or single-home?
5. Does the undertaking control complementary markets?
6. Is data an important competitive input?
7. Does the conduct affect innovation rather than current prices?
8. Does the undertaking have access to information unavailable to competitors?
9. Does the conduct operate differently for different categories of users?
10. Can apparently separate markets operate as one ecosystem?

The concept therefore moves competition law from a purely static market-centred model towards a dynamic, ecosystem- and circumstance-sensitive model.

3. Core Features of Context-Driven Competition

A. Dynamic Market Definition

Markets may change rapidly because of:

• technological innovation;
• new substitutes;
• platform convergence;
• artificial intelligence;
• cloud computing;
• interoperability;
• consumer switching;
• new distribution methods.

A market definition that is accurate today may become inappropriate tomorrow.

The EU's developing approach expressly recognises that digital ecosystems may require analysis through interconnected markets, after-market concepts and broader ecosystem relationships.

B. Ecosystem Competition

A dominant undertaking may not control every individual product market but may possess substantial power because several complementary products reinforce each other.

For example:

Operating System → App Store → Payments → Search → Browser → Advertising → Data

The competitive advantage may therefore arise from the combination of services, rather than from any single product.

The General Court's Google Android judgment expressly examined multi-sided platforms and the concept of an ecosystem in connection with operating systems, app stores and applications.

4. Context-Specific Market Power

Market power in future competition law may increasingly be assessed through several dimensions.

Traditional indicators

• market share;
• price;
• output;
• barriers to entry.

Contextual indicators

• network effects;
• switching costs;
• interoperability;
• access to data;
• algorithmic advantages;
• ecosystem integration;
• user dependence;
• single-homing;
• multi-homing;
• control over gateways;
• technological standards;
• access to infrastructure;
• innovation capabilities.

Thus, a firm with a relatively modest market share might possess substantial contextual power if it controls an indispensable gateway.

Conversely, a firm with a large market share may face strong competitive constraints where users can easily switch among multiple alternatives.

5. Six Major Case Laws

1. United Brands v Commission

Case 27/76, Judgment of 14 February 1978

Principle

The Court established important principles concerning relevant-market definition and substitutability.

The case concerned the banana market and whether bananas constituted a distinct product market.

Importance for context-driven competition

United Brands demonstrates that market definition is not merely a mechanical exercise based on product characteristics. Relevant considerations include:

• characteristics of the product;
• consumer preferences;
• substitutability;
• conditions of competition;
• competitive constraints.

Future significance

The principle can be adapted to modern markets by examining contextual substitutability.

For example, two digital services may appear technically substitutable but may not be commercially substitutable if:

• users are locked into one ecosystem;
• data cannot be transferred;
• applications are unavailable on competing systems;
• switching involves significant costs.

Therefore, functional similarity does not automatically mean effective competitive substitutability.

6. Post Danmark II

Case C-23/14

Principle

The Court examined exclusionary conduct by a dominant undertaking and the assessment of whether conduct was capable of producing anticompetitive effects.

Contextual importance

The case illustrates that competition law must consider the actual economic circumstances surrounding the conduct.

Relevant factors can include:

• market structure;
• position of competitors;
• duration of the conduct;
• coverage of the market;
• barriers to entry;
• characteristics of customers.

Future application

In algorithmic markets, the same discount, exclusivity arrangement or pricing strategy could have different effects depending upon:

• the number of competing platforms;
• the availability of alternative channels;
• switching costs;
• algorithmic ranking;
• customer dependency.

Context therefore becomes part of the assessment of competitive capability.

7. Intel v Commission

Case C-413/14 P; subsequent proceedings including C-240/22 P

Intel is particularly important for contextual assessment of exclusionary rebates.

The Court emphasised the importance of examining the circumstances surrounding allegedly exclusionary rebates rather than treating every rebate mechanism as automatically harmful.

Relevant factors can include:

• dominant undertaking's position;
• share of the market covered;
• conditions surrounding the rebate;
• duration;
• amount;
• possible foreclosure strategy;
• ability of competitors to compete.

The later Intel litigation continued to shape the treatment of economic evidence concerning exclusionary effects. Current EU materials refer to the 2024 Intel judgment in discussing circumstances in which an as-efficient-competitor analysis may be relevant.

Future significance

This supports a broader proposition:

Competition law should examine the competitive mechanism in its economic context rather than classify conduct solely by its formal label.

This is especially relevant for:

• algorithmic discounts;
• personalised pricing;
• loyalty programmes;
• platform commissions;
• cloud credits;
• AI-compute discounts.

8. Google Shopping

Google and Alphabet v Commission, Case T-612/17; C-48/22 P

Google Shopping is one of the clearest examples of context-driven competition.

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

The General Court examined Google's position in general search and the relationship between general search and specialised search services.

The Court of Justice subsequently considered issues including:

• leveraging;
• potential anticompetitive effects;
• causal connection;
• foreclosure capability;
• counterfactual analysis;
• treatment of competitors.

Contextual lesson

The conduct could not be properly understood simply by examining Google's share in comparison shopping.

The relevant context included Google's control of a major gateway—general search—from which competing specialised-search services obtained traffic.

Future significance

This provides a framework for examining:

• app-store ranking;
• AI-search answers;
• digital assistants;
• recommendation engines;
• marketplace ranking;
• platform self-preferencing.

A future competition authority may therefore ask:

Does the undertaking control the contextual environment through which competitors must reach customers?

9. Google Android

Google and Alphabet v Commission, Case T-604/18

The Google Android litigation concerned Google's conduct involving:

• Android;
• Google Search;
• Chrome;
• Google Play;
• device manufacturers;
• mobile network operators.

The General Court treated the matter in the context of a multi-sided platform and ecosystem, examining product bundles, exclusivity arrangements and anti-fragmentation obligations.

Contextual lesson

Android illustrates that competition can operate across interconnected layers.

The competitive position of an operating system can affect:

OS → App distribution → Search → Browser → Advertising → Data

Therefore, analysing each service in complete isolation may fail to capture the competitive dynamics.

Future significance

This reasoning is particularly relevant to:

• AI operating systems;
• cloud ecosystems;
• smart-home ecosystems;
• wearable technology;
• autonomous vehicles;
• connected-health platforms.

10. Servizio Elettrico Nazionale v Autorità Garante della Concorrenza e del Mercato

Case C-377/20

This case concerned the use of information and competitive advantages associated with a former monopolist's position during the transition from monopoly to liberalised competition.

The Court examined whether conduct could constitute an abuse where the undertaking possessed advantages originating from its former position.

Context-driven importance

The case demonstrates that historical and institutional context can matter.

Competition authorities may therefore need to consider:

• how the undertaking acquired its position;
• whether it inherited infrastructure;
• whether it obtained privileged information;
• whether customers were historically dependent on it;
• whether market liberalisation is recent;
• whether competitors have realistic access to customers.

The Court's reasoning has subsequently been cited in EU competition materials dealing with contextual assessment of exclusionary conduct.

Future significance

This becomes relevant for:

• former state monopolies;
• telecommunications;
• electricity grids;
• rail infrastructure;
• public databases;
• government-created digital platforms.

11. Microsoft v Commission

Case T-201/04

Microsoft concerned the relationship between operating systems and complementary software, particularly interoperability and technology ecosystems.

The General Court examined how Microsoft's position in operating systems could affect competition in neighbouring markets. The judgment is also cited in current EU materials concerning network effects.

Contextual lesson

A technology may become strategically important not merely because of its standalone characteristics but because it acts as an infrastructure or gateway for complementary products.

Future significance

The same reasoning may become increasingly important for:

• AI foundation models;
• cloud platforms;
• APIs;
• operating systems;
• digital identity;
• interoperability standards;
• autonomous-machine software.

12. Comparative Summary of the Case Laws

13. Context-Driven Competition in Artificial Intelligence

AI markets create particularly difficult contextual questions.

An AI company may simultaneously control:

• foundation models;
• training data;
• computing capacity;
• cloud infrastructure;
• application interfaces;
• developer ecosystems;
• distribution channels;
• enterprise contracts.

Consequently, market power may not be visible from the market share of a single AI product.

Example

Suppose an undertaking controls:

Cloud infrastructure + GPUs + foundation model + API + application marketplace

Even if several competitors offer AI models, the integrated ecosystem may create substantial competitive advantages through:

• data feedback loops;
• compute availability;
• developer dependence;
• switching costs;
• interoperability restrictions;
• preferential access;
• distribution advantages.

This is precisely the type of environment in which context-sensitive competition analysis becomes important.

The European Commission's 2026 preliminary assessment concerning AWS and Azure illustrates the growing regulatory relevance of entrenched user bases, switching costs, ecosystems and AI-related cloud procurement.

14. Context-Driven Competition and Data

Data may function simultaneously as:

1. an input;
2. a competitive advantage;
3. a barrier to entry;
4. a source of network effects;
5. a means of personalisation;
6. a mechanism for improving algorithms.

The important question is therefore not simply:

"How much data does the undertaking possess?"

It is:

"What competitive advantage does possession, control or exclusive use of that data create in the particular market context?"

A large quantity of non-exclusive data may have limited competitive significance, whereas a smaller quantity of unique behavioural or transaction data may create substantial advantages.

15. Context-Driven Competition and Algorithmic Markets

Future competition authorities may have to examine algorithms themselves.

Relevant issues include:

A. Algorithmic pricing

Competitors may independently use similar algorithms, potentially producing parallel prices without a conventional agreement.

B. Algorithmic ranking

A platform can influence which competitors consumers see.

C. Personalised offers

Different customers may receive different prices or terms.

D. AI recommendations

AI systems can influence which products consumers consider.

E. Autonomous decision-making

Algorithms may dynamically determine:

• prices;
• advertising;
• access;
• ranking;
• inventory;
• matching;
• commissions.

The contextual question becomes:

Who controls the decision environment in which competition occurs?

16. Future Oversight Framework

A future competition authority could employ a Contextual Competition Assessment Framework.

Step 1 — Define the competitive environment

Identify:

• products;
• services;
• users;
• suppliers;
• platforms;
• geographic boundaries.

Step 2 — Identify contextual dependencies

Examine:

• network effects;
• switching costs;
• interoperability;
• data;
• infrastructure;
• standards.

Step 3 — Identify gateways

Ask whether an undertaking controls an essential or strategically important route to customers.

Step 4 — Examine ecosystem relationships

Map:

Core service → complementary service → distribution → data → advertising → users

Step 5 — Analyse conduct

Determine whether conduct involves:

• tying;
• bundling;
• self-preferencing;
• exclusion;
• discriminatory access;
• exclusivity;
• predatory pricing;
• data exploitation;
• interoperability restrictions.

Step 6 — Assess actual and potential effects

Consider:

• foreclosure;
• innovation;
• entry;
• consumer choice;
• quality;
• privacy-related competitive dimensions;
• technological development.

Step 7 — Test counterfactuals

Ask:

What would competitive conditions look like without the disputed conduct?

Step 8 — Monitor dynamically

Competition authorities should reassess markets periodically rather than treating market conditions as permanently fixed.

17. Ex Ante and Ex Post Oversight

Context-driven competition will probably require a combination of two approaches.

Ex Post Competition Law

Used after potentially anticompetitive conduct occurs.

Examples:

• abuse of dominance;
• exclusionary agreements;
• anticompetitive mergers;
• cartel conduct.

Ex Ante Regulation

Used where structural characteristics create persistent risks before traditional antitrust enforcement becomes effective.

The EU's Digital Markets Act represents an important example of this broader regulatory movement. Academic analysis has described the development of EU digital competition governance as a movement from predominantly ex-post enforcement towards an ex-ante framework.

The two approaches are complementary rather than necessarily substitutes.

18. Institutional Changes Required

Future competition authorities may need expertise extending beyond conventional economics and law.

1. Data science units

To analyse:

• algorithms;
• ranking systems;
• recommendation systems;
• datasets.

2. Technical audit teams

To examine:

• APIs;
• interoperability;
• cloud infrastructure;
• platform architecture.

3. Behavioural economists

To examine:

• switching;
• consumer dependence;
• attention;
• behavioural lock-in.

4. Sector specialists

Particularly for:

• AI;
• healthcare;
• energy;
• telecommunications;
• finance;
• autonomous systems.

5. Continuous market monitoring

Authorities may need to monitor rapidly changing markets rather than relying exclusively on complaint-driven investigations.

19. Remedies for Context-Driven Competition Problems

Traditional remedies may include:

• fines;
• prohibition of agreements;
• divestiture;
• behavioural commitments.

Future contextual remedies may additionally include:

Interoperability

Competitors receive technical access to systems.

Data portability

Users can transfer relevant data between services.

Non-discrimination

Platforms cannot selectively disadvantage competing services.

Transparency

Platforms disclose relevant ranking or access criteria.

API access

Competitors obtain reasonable technical access.

Structural separation

Particularly where a platform simultaneously operates infrastructure and competes with dependent businesses.

Algorithmic monitoring

Independent monitoring of potentially exclusionary automated systems.

20. Major Legal Challenges

A. Over-enforcement

Contextual analysis can become excessively broad if every ecosystem advantage is treated as anticompetitive.

B. Under-enforcement

Conversely, conventional market-share analysis may overlook power arising from data, ecosystems and network effects.

C. Innovation

Intervention may unintentionally interfere with legitimate product integration.

D. Causation

Authorities must distinguish genuine competitive harm from ordinary commercial success.

E. Measurement

Some competitive effects are difficult to quantify, particularly:

• innovation;
• quality;
• privacy;
• future entry;
• ecosystem dependence.

F. Regulatory overlap

Competition authorities increasingly interact with:

• data-protection regulators;
• consumer authorities;
• telecommunications regulators;
• AI regulators;
• financial regulators.

21. Emerging Doctrine: From Market Power to Contextual Power

The most important future development may be a shift from:

Market Share → Market Power

towards:

Market Share + Network Effects + Data + Ecosystem + Gateway Control + Switching Costs + Innovation + Institutional Context → Contextual Competitive Power

This does not mean that market definition and market share become irrelevant. Rather, they become part of a larger analytical framework.

Current EU materials already identify factors such as network effects, single-homing, ecosystems, complementary products and switching conditions as relevant to understanding digital competitive conditions.

22. Future Conceptual Model

A useful model is:

CONTEXT

↓

Market Structure
↓
Network Effects
↓
Data & Algorithms
↓
Ecosystem Position
↓
Gateway Control
↓
Switching Costs
↓
Conduct
↓
Foreclosure / Innovation / Consumer Effects
↓
Remedy

This represents a move from a static competition model to a dynamic competition-governance model.

23. Conclusion

Future competition law will increasingly have to recognise that competition does not occur in an abstract market detached from its technological and institutional environment.

The lessons from United Brands, Post Danmark II, Intel, Google Shopping, Google Android, Servizio Elettrico Nazionale and Microsoft demonstrate different aspects of contextual competition: substitutability, economic circumstances, exclusionary effects, gateway control, ecosystems, historical advantages and interoperability.

The central principle for future oversight should therefore be:

Competition should be assessed according to the competitive conditions actually operating within the relevant technological, economic, institutional and behavioural context.

Context-driven competition does not abandon conventional antitrust principles. Instead, it extends them so that dynamic markets, digital ecosystems, data, algorithms, network effects and technological dependencies can be incorporated into competition assessment.