Competition Law and Governance Architecture as a Source of Market Power

1. Introduction

Governance architecture refers to the institutional, contractual, technical and procedural rules through which a market or ecosystem is organized. It includes:

• access and membership rules;
• licensing conditions;
• technical standards and protocols;
• interoperability rules;
• APIs and data-access arrangements;
• ranking and recommendation algorithms;
• dispute-resolution mechanisms;
• certification and accreditation systems;
• platform terms and conditions;
• payment and settlement infrastructure;
• default settings;
• switching and portability rules; and
• rules determining who can participate in decision-making.

Competition law traditionally examines market shares, pricing, exclusion, tying, exclusive dealing and mergers. Modern competition analysis increasingly recognizes that market power can also arise from control over the architecture through which competitors must operate.

Thus, a firm may possess market power not merely because it sells the dominant product, but because it designs the rules of the competitive environment itself.

This is particularly important in digital ecosystems, operating systems, app stores, payment systems, cloud platforms, online marketplaces, standards organizations and other network industries.

2. Meaning of Governance Architecture

Governance architecture can be understood as the combination of:

Rules + infrastructure + decision-making authority + access conditions + technical standards + information flows

A governance architecture becomes competition-relevant when the entity controlling it can determine:

1. who can enter the ecosystem;
2. who receives access;
3. which products are visible;
4. which competitors can interoperate;
5. what data competitors receive;
6. what fees competitors pay;
7. which technical standards must be followed;
8. how disputes are resolved; and
9. whether users can switch to competing systems.

Example

Consider an app-store ecosystem:

Operating system → App Store → payment system → ranking algorithm → developer rules → consumer access

If one company controls every layer, it may simultaneously be:

• infrastructure provider;
• marketplace operator;
• rule-maker;
• competitor;
• payment intermediary; and
• adjudicator of disputes.

That combination creates the possibility of structural conflicts of interest.

3. Governance Architecture as a Source of Market Power

Governance architecture can generate or reinforce market power through several mechanisms.

A. Control over access

A platform can determine who may enter its ecosystem and on what conditions.

Examples include:

• developer approval;
• licensing requirements;
• certification;
• API access;
• technical compatibility;
• payment-system access; and
• membership rules.

Where participation in the ecosystem is commercially indispensable, exclusion from the governance structure may effectively amount to exclusion from the market.

B. Network effects

Governance structures can reinforce network effects.

The mechanism can be represented as:

More users → more complementors → more functionality → more users → stronger platform → greater market power

Once the ecosystem becomes sufficiently large, competing platforms may face a coordination problem: consumers do not want to leave because their preferred applications are there, while developers do not want to leave because consumers are there.

This can make governance rules economically more important than the nominal price of the platform.

4. Governance Power and Switching Costs

Governance architecture can increase switching costs through:

• proprietary data formats;
• non-portable data;
• closed APIs;
• technical incompatibility;
• contractual restrictions;
• accumulated user reputation;
• loyalty programmes;
• application dependencies; and
• ecosystem-specific investments.

The result is:

Architectural control → switching costs → reduced mobility → weaker competitive constraint → greater market power.

The EU's current Digital Markets Act framework specifically addresses interoperability and data portability for designated gatekeepers, illustrating the increasing importance of these architectural characteristics in competition regulation.

5. Governance Architecture and Self-Preferencing

One of the most important problems occurs where a platform simultaneously:

1. operates the marketplace; and
2. competes inside that marketplace.

The platform may then design its governance rules to favour its own products.

Examples include:

• preferential ranking;
• privileged access to data;
• better placement;
• preferential interoperability;
• favourable eligibility criteria;
• lower transaction costs; or
• preferential access to consumers.

The resulting structure can be described as:

Platform owner + regulator + infrastructure provider + competitor

This combination does not automatically violate competition law. The legal issue arises when architectural control is used in a manner that constitutes exclusionary abuse, discriminatory access, tying, self-preferencing or another prohibited practice.

6. Governance Architecture and Information Asymmetry

Control of information is another source of market power.

A platform may possess:

• transaction data;
• consumer behaviour data;
• seller performance data;
• search data;
• pricing information;
• conversion rates;
• customer preferences; and
• competitor performance information.

If the platform can use this information to compete against the firms that depend upon it, it may acquire a structural advantage.

This issue was central to the European Commission's Amazon Marketplace investigation. The Commission examined Amazon's use of non-public seller data and concerns concerning Buy Box and Prime eligibility. Amazon subsequently offered commitments addressing these issues.

7. Governance Architecture and Algorithmic Power

Modern governance is increasingly algorithmic.

A platform's algorithm may determine:

• search ranking;
• product visibility;
• recommendations;
• advertising placement;
• Buy Box allocation;
• access to consumers;
• eligibility for services; and
• pricing or matching.

Therefore, algorithmic governance can become an instrument of market power.

The competition-law question is not simply:

"Does the algorithm produce a better result?"

It is also:

"Who controls the algorithm, what competitive constraints exist on that control, and whether the algorithm systematically disadvantages competing firms?"

8. Major Case Laws

Case 1: United States v. Microsoft Corp. — United States

Court: U.S. District Court for the District of Columbia / D.C. Circuit
Law: Sherman Act §§ 1 and 2

Facts

Microsoft possessed a dominant position in PC operating systems and used its control over Windows to influence the distribution of competing browsers and other middleware.

The case involved:

• technological integration;
• contractual restrictions;
• OEM relationships;
• distribution arrangements; and
• attempts to prevent competing technologies from becoming alternative platforms.

The court ultimately found that Microsoft unlawfully maintained its operating-system monopoly through exclusionary conduct.

Governance significance

Microsoft demonstrates how control of a technological platform can become control over the competitive environment surrounding that platform.

The important principle is:

A dominant platform cannot use the rules and technical architecture of its platform to unlawfully exclude competitive threats.

The eventual remedies included restrictions concerning contractual tying and protection for competing middleware, together with interoperability-related obligations.

Relevance

This is one of the foundational cases for understanding platform governance as a potential source of market power.

9. Case 2: Google Shopping — European Union

Case: Google Search (Shopping)
Article: Article 102 TFEU

The European Commission found that Google abused its dominance in general search by giving prominent placement to its own comparison-shopping service while demoting competing comparison-shopping services.

The Commission imposed a €2.42 billion fine in 2017.

Governance architecture issue

Google controlled the search-ranking architecture.

That architecture determined:

• visibility;
• traffic;
• consumer attention;
• click-through opportunities; and
• ultimately commercial viability.

Consequently, control over the ranking system became an important competitive resource.

Principle

The case illustrates the concept of:

Control over market infrastructure + preferential treatment of own service = potential exclusionary advantage.

The importance of this case extends beyond search engines because similar questions arise whenever a platform controls the rules determining visibility within a market.

10. Case 3: Google Android — European Union

Case: Google and Alphabet v European Commission, Case T-604/18; later appeal C-738/22 P

The EU proceedings concerned Google's Android ecosystem and practices involving:

• Android operating systems;
• Google Play;
• Google Search;
• Chrome;
• device manufacturers;
• exclusivity payments; and
• anti-fragmentation arrangements.

The General Court characterized the matter in terms of a multi-sided platform/ecosystem and examined product bundling, exclusivity payments and anti-fragmentation obligations.

In July 2026, the Court of Justice issued its judgment in the appeal, concerning contractual restrictions, tying, exclusionary effects, exclusive pre-installation payments and Android forks.

Governance significance

Android demonstrates that ecosystem governance can extend beyond a single product market.

The relevant architecture involved:

OS → Play Store → applications → search → device manufacturers → users

Control over one layer could therefore influence competitive conditions in another.

Principle

Competition analysis may need to examine the whole ecosystem and the interaction between its layers, rather than treating each component as completely independent.

11. Case 4: Apple — App Store / Music Streaming

Case: Apple App Store practices concerning music-streaming applications
Article: Article 102 TFEU

In 2024, the European Commission fined Apple more than €1.8 billion concerning restrictions that prevented music-streaming developers from informing users about alternative and cheaper subscription options outside the App Store.

Governance architecture

Apple controlled:

• iOS;
• the App Store;
• app distribution;
• payment-related rules;
• developer contractual conditions; and
• communication between developers and consumers.

The concern was therefore not simply the level of Apple's commission.

The deeper issue was control over the communication architecture between suppliers and consumers.

Competition significance

A platform can possess market power when it controls the rules governing whether competitors are permitted to tell consumers:

"You can buy this service elsewhere."

This demonstrates that information-flow governance can have competitive importance.

12. Case 5: Amazon Marketplace

Case: Amazon Marketplace / Buy Box and Prime investigations

The European Commission examined Amazon's use of non-public marketplace seller data and its practices concerning the Buy Box and Prime eligibility.

The Commission's assessment indicated concerns that Amazon's own retail business could benefit from marketplace information and that Buy Box/Prime criteria could favour Amazon's retail or logistics operations.

Amazon subsequently offered commitments involving:

• restrictions on the use of non-public seller data;
• more neutral Buy Box arrangements;
• seller choice of logistics providers; and
• non-discriminatory Prime conditions. 

Governance significance

Amazon demonstrates the special problem of dual-role governance:

Marketplace regulator + marketplace participant

The platform controls the rules while simultaneously competing with the businesses subject to those rules.

Principle

Competition authorities may therefore examine whether governance decisions create a structural competitive advantage for the platform's own downstream business.

13. Case 6: Ohio v. American Express

Court: U.S. Supreme Court
Year: 2018

This case concerned the antitrust treatment of a two-sided transaction platform.

The Supreme Court emphasized the interdependent nature of the two sides of the platform and required the effects of the challenged conduct to be considered in the context of the platform's two-sided structure.

Governance significance

American Express is important because it demonstrates that platform governance cannot always be analyzed through a simple one-sided market model.

A platform's rules may affect:

• consumers;
• merchants;
• advertisers;
• developers;
• sellers; and
• other participating groups.

Principle

The competitive effect of a governance rule may therefore have to be assessed across interdependent sides of a platform.

This is particularly relevant to:

• payment networks;
• app stores;
• marketplaces;
• advertising platforms;
• social networks; and
• digital intermediaries.

14. Case 7: Google Android — Competition Commission of India

Case: Umar Javeed & Others v. Google LLC & Another
CCI Case No. 39/2018

The Competition Commission of India examined Google's Android ecosystem and found Google dominant in relevant markets involving licensable smart-mobile operating systems and Android app stores. The CCI imposed a penalty of ₹1,337.76 crore in the Android matter in October 2022.

Governance significance

The Indian analysis is particularly relevant to governance architecture because Android involves multiple interconnected layers:

Operating system → app store → applications → search → device manufacturers → users

The CCI's identification of separate but connected relevant markets demonstrates how competition authorities can examine ecosystem power through multiple interconnected markets.

Principle

Dominance in a core technological layer can potentially be leveraged into adjacent ecosystem layers through contractual, technical or commercial restrictions.

15. Comparative Table

16. Governance Architecture and Essential Facilities

Governance architecture can overlap with the essential-facilities doctrine.

The issue becomes particularly significant where:

1. the infrastructure is difficult to duplicate;
2. competitors require access to it;
3. the infrastructure operator controls access;
4. denial or discriminatory access substantially impairs competition; and
5. there is insufficient competitive alternative.

Examples may include:

• payment infrastructure;
• telecommunications networks;
• cloud infrastructure;
• digital identity systems;
• app stores;
• interoperability interfaces;
• critical data infrastructures; and
• energy networks.

However, not every commercially important platform is legally an essential facility. Competition law generally requires the applicable jurisdictional test to be satisfied.

17. Governance Architecture and Interoperability

Interoperability is increasingly central to competition policy.

A closed architecture can produce:

Closed technical standards → dependency → switching costs → reduced entry → stronger market power

An interoperable architecture may instead facilitate:

Interoperability → multi-homing → lower switching costs → entry → competitive constraint

The EU DMA expressly uses interoperability and data-portability obligations to address aspects of gatekeeper power.

18. Governance Architecture and Data Portability

Data portability is particularly important because historical data can create significant competitive advantages.

Suppose a consumer has accumulated:

• contacts;
• transaction history;
• playlists;
• purchase history;
• professional reputation;
• photographs;
• health or fitness records; or
• business relationships

inside one ecosystem.

If those assets cannot be transferred, the consumer or business may face significant switching costs.

Therefore:

Data accumulation + limited portability = ecosystem lock-in

Competition regulation increasingly treats portability as a mechanism for improving contestability rather than merely as a privacy issue.

19. Governance Architecture and Gatekeeper Power

The Digital Markets Act represents a major shift from traditional ex-post competition enforcement.

The DMA identifies certain large digital platforms as gatekeepers and imposes predefined obligations concerning their core platform services. The EU currently identifies gatekeepers including Alphabet, Amazon, Apple, Booking, ByteDance, Meta and Microsoft.

This reflects an important conceptual development:

Traditional model

Market power → harmful conduct → investigation → remedy

Governance-oriented model

Structural gatekeeper position → predefined behavioural constraints → continuous compliance

This is especially significant because governance architecture can change rapidly, while traditional antitrust investigations may take years.

20. Governance Architecture and Cloud Computing

The issue is expanding beyond traditional platforms.

In 2026, the European Commission preliminarily concluded that Amazon Web Services and Microsoft Azure could qualify as important gateways despite not meeting the quantitative DMA thresholds, because of their entrenched user bases, switching costs, ecosystems and importance to businesses.

This illustrates an important competition-law development:

Market power may arise from being an indispensable gateway even where conventional market-share thresholds do not fully capture the source of power.

Cloud infrastructure can function as a governance layer for:

• AI systems;
• applications;
• databases;
• enterprise software;
• cybersecurity;
• digital services; and
• public-sector infrastructure.

21. Governance Architecture and AI

AI creates a new generation of governance-power questions.

A dominant AI ecosystem may control:

• foundation models;
• computing infrastructure;
• APIs;
• model access;
• developer rules;
• data;
• application stores;
• cloud distribution;
• safety standards; and
• interoperability requirements.

This could produce a chain such as:

Compute → Foundation model → API → Application ecosystem → User data → Distribution

If one enterprise controls several layers, it may potentially leverage power from one layer into another.

Competition authorities must therefore distinguish between:

• legitimate technological integration;
• efficiency-enhancing vertical integration;
• genuine security requirements; and
• exclusionary architectural restrictions.

22. Governance Architecture and Private Standard-Setting

Governance power is not limited to corporations.

Industry organizations can also exercise competitive influence through:

• technical standards;
• certification systems;
• membership rules;
• licensing standards;
• interoperability protocols; and
• standard-essential patents.

A standard may become commercially indispensable.

Consequently:

Private standard → widespread adoption → dependency → control over compliance → potential market power

Competition law may become relevant where standard-setting is manipulated to exclude rivals or where access to a necessary standard is granted on discriminatory or exclusionary terms.

23. Governance Architecture and Merger Control

Governance architecture is also relevant to mergers.

A merger can combine:

• data;
• operating systems;
• cloud infrastructure;
• marketplaces;
• payment systems;
• distribution channels; and
• technical standards.

The concern may not simply be increased market share.

It may be:

Will the merged undertaking acquire control over a critical layer of the market's governance architecture?

This is particularly important for vertical and conglomerate transactions.

24. Competition Risks Created by Governance Architecture

The principal risks can be summarized as follows:

1. Access discrimination

Competitors receive inferior access to infrastructure.

2. Self-preferencing

The platform favours its own downstream products.

3. Tying

Access to one architectural layer is conditioned on another product or service.

4. Interoperability foreclosure

Technical restrictions prevent competing products from working effectively.

5. Data leveraging

Platform-generated information is used to disadvantage dependent competitors.

6. Algorithmic discrimination

Ranking systems systematically favour the platform or selected participants.

7. Switching-cost exploitation

Users are prevented from moving data or relationships to competing systems.

8. Exclusive dealing

Participants are discouraged or prevented from using competing platforms.

9. Standard-setting exclusion

Technical standards are manipulated to exclude competing technologies.

10. Regulatory capture within private ecosystems

The entity with commercial interests also controls the rules determining competitive participation.

25. Possible Competition-Law Remedies

Where governance architecture produces unlawful competitive effects, remedies may include:

A. Non-discrimination obligations

Equivalent competitors must receive equivalent treatment.

B. Interoperability

Dominant infrastructure may be required to provide technically meaningful interoperability.

C. Data portability

Users and businesses may be permitted to transfer relevant data.

D. Transparency

Platforms may be required to disclose relevant ranking or access criteria.

E. Separation of roles

A platform may be restricted from simultaneously acting as:

• infrastructure provider;
• marketplace operator; and
• competitor.

F. Choice architecture

Users may be given meaningful choices concerning:

• defaults;
• payment systems;
• applications;
• search services; and
• service providers.

G. Monitoring trustees

Independent monitoring mechanisms may supervise compliance.

H. Structural remedies

In exceptional circumstances, separation of businesses or assets may be considered.

26. Key Legal Test

A useful analytical framework is:

Step 1 — Identify the architecture

What infrastructure or governance system is being controlled?

Step 2 — Identify the gatekeeper

Who controls the rules?

Step 3 — Identify dependency

Which competitors or consumers depend upon the architecture?

Step 4 — Identify the source of power

Is power generated by:

• network effects?
• data?
• switching costs?
• technical standards?
• scale?
• interoperability?
• vertical integration?

Step 5 — Identify the conduct

Is the controller:

• excluding;
• tying;
• discriminating;
• self-preferencing;
• restricting interoperability;
• withholding data;
• imposing exclusivity; or
• manipulating ranking?

Step 6 — Identify competitive effects

Does the architecture:

• foreclose competitors;
• raise rivals' costs;
• prevent entry;
• reduce innovation;
• increase switching costs; or
• weaken contestability?

Step 7 — Examine justification

Are there legitimate:

• security;
• privacy;
• technical;
• efficiency; or
• consumer-protection

justifications?

Step 8 — Select the remedy

Possible remedies range from behavioural obligations to interoperability, portability, non-discrimination and, in exceptional cases, structural intervention.

27. Flowchart

Governance Architecture          ↓ Control over Infrastructure / Rules          ↓ Competitor or Consumer Dependency          ↓ Network Effects + Data + Switching Costs          ↓ Structural Market Power          ↓ Control over Access / Ranking / Interoperability          ↓ Potential Exclusion / Self-Preferencing / Tying          ↓ Reduced Contestability          ↓ Competition-Law Intervention          ↓ Access / Interoperability / Portability / Non-Discrimination / Behavioural or Structural Remedies

28. Distinction Between Governance Power and Illegal Abuse

An important examination point is that:

Governance power itself is not necessarily unlawful.

A company may legitimately design its ecosystem, establish technical standards and impose reasonable rules.

Competition law becomes relevant when market power is combined with conduct that unlawfully restricts competition or where a specialized regulatory regime such as the DMA imposes additional obligations.

Therefore, the proper analytical distinction is:

Governance authority ≠ automatically unlawful

but:

Governance authority + dominance/gatekeeper status + exclusionary conduct + competitive harm = potential competition-law liability.

29. Conclusion

Governance architecture has become an increasingly important source of market power because modern markets are frequently organized through platforms, technical standards, APIs, algorithms, operating systems, payment systems and data infrastructures.

The Microsoft, Google, Apple, Amazon, American Express and CCI Android cases demonstrate different manifestations of this phenomenon. Microsoft shows the importance of operating-system architecture; Google Shopping demonstrates control over ranking; Android demonstrates ecosystem leverage; Apple illustrates control over information and distribution rules; Amazon demonstrates the risks of a platform competing against firms subject to its own marketplace rules; and American Express demonstrates the distinctive economics of two-sided platforms.

The central competition-law lesson is therefore:

Market power can arise not only from controlling what is sold, but from controlling the rules, infrastructure and technical architecture through which others must compete.

Modern competition law consequently has to examine who makes the rules, who controls access, who controls information, who determines visibility, who controls interoperability, and whether the rule-maker is simultaneously a competitor.

That makes governance architecture an important bridge between traditional do