Competition Law and Private Rulemaking Power in Platform Ecosystems

1. Introduction

Digital platforms do not merely provide a technological marketplace. Large platforms increasingly make and enforce their own rules governing access, ranking, pricing, commissions, data use, interoperability, advertising, payments, seller eligibility, content, and dispute resolution.

This is often described as private rulemaking power or private regulatory power.

A platform may, for example:

• determine which sellers may enter its marketplace;
• decide which products receive higher rankings;
• establish the conditions for app-store access;
• impose payment or commission rules;
• determine eligibility for preferred programmes;
• control access to data and APIs;
• impose parity or non-discrimination requirements;
• decide how its algorithm allocates visibility;
• modify technical standards affecting rivals; and
• impose contractual or technological restrictions on users and business partners.

The competition-law issue arises when a platform with substantial market power uses these privately created rules not simply to organise its ecosystem, but to exclude competitors, discriminate between trading partners, leverage dominance into adjacent markets, or make entry and expansion more difficult.

The central question is therefore:

When does legitimate platform governance become an exercise of market power that competition law must regulate?

This question is particularly important because traditional competition law generally regulates conduct by firms, whereas platforms increasingly perform functions resembling private regulators of entire ecosystems.

2. Meaning of Private Rulemaking Power

Private rulemaking power refers to the ability of a private platform to establish rules that determine how other market participants can operate within an ecosystem.

Examples include:

A. Access rules

A platform may determine:

• who can join;
• what technical standards must be satisfied;
• what licences or certifications are required;
• whether APIs are available;
• whether applications can access operating-system functions.

B. Ranking rules

The platform may determine:

• search ranking;
• recommendation ranking;
• visibility;
• advertising placement;
• Buy Box allocation;
• preferred-seller status.

C. Commercial rules

These may include:

• commissions;
• platform fees;
• minimum prices;
• price-parity clauses;
• discounting restrictions;
• payment requirements.

D. Data rules

Platforms may determine:

• who can access transaction data;
• whether sellers can use consumer data;
• whether the platform itself may use seller data;
• portability;
• interoperability;
• access to APIs.

E. Technical rules

Platforms may control:

• interoperability;
• operating-system access;
• app-store requirements;
• authentication;
• payment systems;
• technical standards.

F. Enforcement rules

Platforms can also privately enforce their rules through:

• suspension;
• delisting;
• demotion;
• account termination;
• loss of preferred status;
• algorithmic reduction in visibility.

Thus, platform rules can have effects similar to regulation even though they are created by a private undertaking.

3. Why Private Rulemaking Creates Competition Concerns

Private rulemaking is not inherently unlawful.

A platform needs rules to make its ecosystem function.

For example, an app store legitimately needs:

• cybersecurity requirements;
• malware restrictions;
• technical compatibility standards;
• consumer-protection rules.

Similarly, an online marketplace legitimately needs:

• seller verification;
• product-quality standards;
• fraud prevention;
• delivery requirements.

The competition concern arises when rules are designed or applied in a manner that exploits or protects market power.

The principal concerns are:

1. self-preferencing;
2. exclusionary access conditions;
3. discriminatory enforcement;
4. tying and bundling;
5. interoperability restrictions;
6. ranking manipulation;
7. data exploitation;
8. parity obligations;
9. excessive or discriminatory platform fees;
10. retaliation against competitors;
11. algorithmic exclusion; and
12. leveraging from one market into another.

4. Legal Framework

A. Abuse of Dominance

The principal competition-law framework is abuse of dominance.

European Union

Article 102 TFEU addresses abuse of a dominant position.

Potentially relevant conduct includes:

• discriminatory conditions;
• limiting technical development;
• tying;
• exclusionary conduct;
• refusal of access;
• leveraging;
• unfair trading conditions.

India

Section 4 of the Competition Act, 2002 addresses abuse of dominant position.

Relevant provisions include:

• Section 4(2)(a): unfair or discriminatory conditions;
• Section 4(2)(b): limiting or restricting production or technical/scientific development;
• Section 4(2)(c): denial of market access;
• Section 4(2)(d): supplementary obligations;
• Section 4(2)(e): leveraging dominance in one relevant market to enter or protect another.

These provisions are particularly relevant to platform rulemaking.

5. Platform Governance and Market Definition

A platform frequently operates a multi-sided market.

For example:

Consumers ↔ Platform ↔ Sellers

or:

App developers ↔ App store ↔ Consumers

or:

Advertisers ↔ Advertising platform ↔ Users

Competition analysis therefore cannot necessarily treat the platform as operating in only one market.

The U.S. 2023 Merger Guidelines expressly recognise that platform competition can occur:

1. between platforms;
2. on a platform; and
3. to displace a platform. 

This is highly relevant to private rulemaking because a rule can simultaneously affect several sides of the ecosystem.

6. Major Competition-Law Issues

I. Self-Preferencing

Self-preferencing occurs when a platform gives preferential treatment to its own products or services.

For example:

Platform → ranking algorithm → platform's own product → higher visibility

The concern is particularly strong where the platform controls the principal route through which competitors reach customers.

Competition concern

A dominant platform may use its gatekeeping position to:

• increase visibility of its own products;
• reduce visibility of rivals;
• privilege its own services in search results;
• manipulate recommendation systems;
• allocate preferred placement to affiliated businesses.

7. Google Shopping

Case: Google and Alphabet v European Commission

Case C-48/22 P, Google Shopping, Court of Justice, 2024

This is one of the most important authorities on platform rulemaking.

Google operated a general search engine and also operated its own specialised comparison-shopping service.

The EU authorities found that Google gave preferential positioning and display to its own comparison-shopping results while applying less favourable treatment to competing comparison-shopping services.

The Court of Justice ultimately upheld the essential finding that this conduct could constitute abuse of dominance. The judgment specifically concerned leveraging, discriminatory treatment of competing services, and the relationship between Google's general search service and its specialised search service.

Importance

Google Shopping demonstrates that:

An algorithmic ranking system can itself become a competition-law instrument when controlled by a dominant platform.

The platform's "internal rules" for ranking were therefore not immune from competition scrutiny merely because they were implemented through algorithms.

8. Google Android

Case: Google and Alphabet v European Commission

Case T-604/18, General Court, 14 September 2022

The Google Android case concerned Google's Android ecosystem, including:

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

The General Court largely upheld the Commission's findings concerning restrictions imposed on device manufacturers and mobile network operators, including product bundling, exclusivity payments and anti-fragmentation obligations.

Importance for private rulemaking

Google's contractual and technical conditions effectively determined:

what manufacturers could do inside the Android ecosystem.

The case illustrates how platform governance can extend beyond ordinary contracts into ecosystem-wide competitive control.

9. Amazon Marketplace

Case: European Commission – Amazon Marketplace

The European Commission investigated Amazon's use of non-public marketplace seller data and the operation of its Buy Box and Prime systems.

The Commission's concerns included:

• use of non-public seller data by Amazon Retail;
• possible bias in Buy Box selection;
• preferential treatment connected with Prime;
• Amazon's logistics services.

Amazon ultimately offered commitments concerning these mechanisms. The commitments included restrictions on the use of non-public seller data, changes to Buy Box presentation, non-discriminatory Prime qualification conditions and greater freedom for sellers regarding logistics providers.

Importance

This illustrates a central feature of private rulemaking:

The platform simultaneously acts as marketplace operator, rulemaker and competitor.

That combination can create conflicts of interest.

10. Amazon – United States

Case: FTC and State Attorneys General v Amazon.com

The U.S. Federal Trade Commission and 17 states sued Amazon in 2023, alleging that Amazon maintained monopoly power through interconnected exclusionary strategies.

The allegations included:

• restrictions affecting sellers' pricing;
• practices concerning Amazon's marketplace;
• advertising-related conduct;
• preferential treatment of Amazon products;
• fees imposed on sellers.

The FTC's case summary describes the alleged conduct as affecting competition in online superstore and marketplace services.

Importance

The case demonstrates the potential competition significance of private marketplace rules.

A platform's seller policies may appear contractual when examined individually, but their cumulative effect can potentially influence:

• prices;
• seller participation;
• advertising;
• product visibility;
• entry;
• consumer choice.

11. MakeMyTrip–GoIbibo–OYO

Case: Federation of Hotel & Restaurant Associations of India v MakeMyTrip India Pvt. Ltd. & Others

CCI Case Nos. 14/2019 and 01/2020, 19 October 2022

The Competition Commission of India examined conduct involving online hotel-booking platforms.

The allegations included:

• price-parity requirements;
• room-parity obligations;
• preferential treatment;
• delisting;
• commissions;
• preferential treatment of OYO;
• restrictions affecting competing hotel chains.

CCI considered the characteristics of two-sided and multi-sided platform markets when analysing the conduct.

Importance

This case shows how platform rules concerning commercial parity and visibility can influence competition between businesses operating through the platform.

A platform may therefore exercise market power not merely through price but through its contractual architecture.

12. Google Play Store – India

Case: Umar Javeed & Others v Google LLC

CCI Case No. 39/2018

CCI examined Google's conduct concerning Android mobile devices and the Play Store ecosystem.

CCI found Google dominant in relevant markets and identified several forms of allegedly abusive conduct under Section 4.

A related Play Store proceeding resulted in CCI imposing a penalty of ₹936.44 crore concerning Google's Play Store policies. The case concerned the relationship between app developers, Google's Play Store and Google's payment ecosystem.

The NCLAT subsequently partly modified the relevant Play Store findings and reduced the penalty to ₹216.69 crore in its 28 March 2025 decision.

Importance

The case illustrates the regulatory significance of:

• app-store payment rules;
• access conditions;
• developer obligations;
• platform commissions;
• restrictions on alternative payment mechanisms.

The app store is therefore not simply a technical distribution channel; its rules can structure competition among developers.

13. WhatsApp / Meta Privacy Policy

Case: In Re Updated Terms of Service and Privacy Policy for WhatsApp Users

CCI Suo Motu Case No. 01/2021

CCI investigated WhatsApp's 2021 privacy-policy update and examined the relationship between WhatsApp's data practices and Meta's broader ecosystem.

The case illustrates how data conditions themselves can become competition-law issues, particularly where a dominant platform imposes conditions that affect the competitive position of related markets.

CCI subsequently issued a 2024 order concerning the WhatsApp/Meta privacy-policy matter and imposed a monetary penalty of ₹213.14 crore.

Importance

This expands the concept of private rulemaking beyond traditional commercial rules.

A platform's:

privacy policy + data-sharing policy + terms of service

may collectively function as an important competitive rulebook.

14. Flipkart – India

Case: Delhi Vyapar Mahasangh v Flipkart Internet Pvt. Ltd.

CCI Case No. 40/2019

CCI examined allegations concerning practices in the e-commerce platform ecosystem.

The subsequent proceedings concerning Amazon and Flipkart also involved allegations concerning:

• exclusive arrangements;
• preferred sellers;
• preferential listing;
• discounts;
• relationships between platforms and sellers.

The Karnataka High Court proceedings concerning the investigation are recorded by CCI in Flipkart Internet Pvt. Ltd. v CCI & Others.

The investigation materials specifically recognised that preferential listing and exclusive arrangements could potentially affect competition on the platform and warranted examination of how the relevant vertical arrangements operated.

Importance

This demonstrates that seller-ranking and platform-selection rules can be relevant to competition analysis even where they are framed as ordinary platform policies.

15. The Different Forms of Private Rulemaking

16. Private Rulemaking and Self-Preferencing

A particularly difficult issue is when the platform is both:

Rulemaker + competitor.

For example:

Marketplace

→ creates ranking rules
→ sells its own products
→ determines seller eligibility
→ controls advertising
→ controls customer data.

The platform can theoretically create rules that benefit its own downstream business.

This is why self-preferencing has become a major competition-policy issue.

The Google Shopping case is the leading EU judicial authority, while Amazon Marketplace investigations demonstrate how similar issues can arise in e-commerce.

17. Private Rulemaking and Discrimination

Discrimination may occur in several forms:

Direct discrimination

Different sellers receive different contractual conditions.

Algorithmic discrimination

Two equivalent products receive different rankings.

Data discrimination

The platform provides valuable information to its own affiliate but not to rivals.

Technical discrimination

The platform provides better API functionality to affiliated services.

Commercial discrimination

The platform imposes different commissions or conditions.

Under abuse-of-dominance law, discriminatory treatment can become particularly problematic when it places trading partners at a competitive disadvantage.

18. Private Rulemaking and Refusal of Access

Platforms can also control access to essential ecosystem infrastructure.

Examples:

• app stores;
• payment systems;
• operating systems;
• APIs;
• identity systems;
• cloud infrastructure;
• interoperability interfaces.

The competition question is not simply:

"Does the platform have to allow access?"

Instead, the analysis may ask:

1. Is the platform dominant?
2. Is access indispensable or commercially important?
3. Is the access rule objectively justified?
4. Does the rule exclude rivals?
5. Does it restrict innovation?
6. Does it protect an adjacent platform business?
7. Are equivalent alternatives realistically available?

19. Network Effects Strengthen Private Rulemaking

Platform markets frequently exhibit network effects.

More users attract more sellers.

More sellers attract more users.

More users generate more data.

More data can improve algorithms.

Better algorithms attract additional users.

This can create:

Users → Data → Better service → More users → More sellers → More data

Consequently, an incumbent platform's private rules may have effects extending beyond the immediate transaction.

A seemingly small rule—for example, restricting access to a ranking mechanism—can become significant if competitors need that mechanism to achieve sufficient scale.

20. Switching Costs

Private rulemaking becomes particularly significant where users or business partners face high switching costs.

Examples include:

• loss of transaction history;
• loss of reviews;
• loss of followers;
• loss of customer data;
• loss of reputation scores;
• incompatibility with other services;
• contractual lock-in;
• loss of accumulated platform benefits.

Therefore, the platform's rules may affect contestability, not merely current competition.

21. Algorithmic Rulemaking

Modern platforms increasingly use algorithms rather than human decision-makers.

For example:

Seller → algorithm → ranking → customer visibility

The legal problem is that the platform may argue:

"The algorithm simply follows neutral technical criteria."

Competition law can nevertheless examine the economic effect and design of the system.

Relevant questions include:

• What variables influence ranking?
• Are affiliated products treated differently?
• Are rivals systematically demoted?
• Does advertising influence organic placement?
• Can sellers understand the ranking criteria?
• Can the platform modify the algorithm unilaterally?
• Does the algorithm favour ecosystem participation?

Thus, algorithmic governance does not automatically place platform rules outside competition law.

22. Private Rulemaking and the Digital Markets Act

The European Union has moved beyond relying exclusively on traditional ex-post competition enforcement.

The Digital Markets Act establishes ex-ante obligations for designated gatekeepers.

The Commission designated Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft as gatekeepers in 2023.

The DMA addresses areas such as:

• interoperability;
• data combination;
• self-preferencing;
• app-store steering;
• choice screens;
• access to business users;
• restrictions on alternative distribution.

In 2024, the Commission opened proceedings involving Alphabet, Apple and Meta concerning, among other matters, app-store steering and self-preferencing concerns.

By March 2026, the designated gatekeepers had submitted updated DMA compliance reports for Commission assessment.

Significance

The DMA effectively imposes a layer of public rules on private rulemakers.

It therefore changes the relationship from:

Platform makes rules → competition authority intervenes after harm

towards:

Platform has legally defined obligations → platform governance must comply ex ante.

23. Private Rulemaking vs Public Regulation

This distinction explains why large digital platforms increasingly attract regulatory scrutiny.

24. Legitimate Rulemaking vs Anticompetitive Rulemaking

A useful competition-law framework is:

Step 1 — Identify the rule

What exactly has the platform imposed?

Step 2 — Identify the affected market

Which market is affected?

Step 3 — Establish market power

Does the platform possess substantial market power or dominance?

Step 4 — Identify the mechanism

Does the rule involve:

• access;
• ranking;
• data;
• pricing;
• payment;
• interoperability;
• exclusivity;
• discrimination?

Step 5 — Examine competitive effects

Does the rule:

• foreclose rivals?
• raise their costs?
• reduce visibility?
• prevent entry?
• reduce innovation?
• restrict consumer choice?

Step 6 — Examine justification

Is there a legitimate reason such as:

• cybersecurity;
• privacy;
• fraud prevention;
• technical compatibility;
• consumer safety?

Step 7 — Examine proportionality

Could the legitimate objective be achieved through a less restrictive rule?

Step 8 — Consider remedies

Possible remedies include:

• non-discrimination;
• interoperability;
• access obligations;
• transparency;
• data separation;
• prohibition of self-preferencing;
• behavioural commitments;
• structural remedies in exceptional cases.

25. Competition Law Theory Behind Private Rulemaking

Private rulemaking can produce three distinct competition problems.

A. Rulemaking as exclusion

The platform creates rules that make it harder for rivals to participate.

B. Rulemaking as discrimination

The platform gives its own business or selected partners more favourable conditions.

C. Rulemaking as leveraging

The platform uses dominance in one market to obtain or protect power in another market.

For example:

Dominant operating system
↓
App-store control
↓
Payment restrictions
↓
Advantage for affiliated payment service

This is the type of ecosystem leverage illustrated by Google Android and Google Play Store proceedings.

26. Remedies for Abusive Private Rulemaking

Competition authorities can employ several remedies.

1. Non-discrimination obligations

Equivalent businesses must receive equivalent treatment.

2. Ranking transparency

Platforms may be required to explain material ranking criteria.

3. Interoperability

Rivals may receive access to technical interfaces.

4. Data separation

Platform-generated seller data may be prevented from being used competitively by the platform's own downstream business.

Amazon's European commitments, for example, addressed the use of non-public seller data and Buy Box conditions.

5. Choice mechanisms

Users may be offered genuine choices concerning:

• browsers;
• search engines;
• payment systems;
• app distribution.

6. Structural separation

In exceptional cases, a platform's marketplace and competing downstream business may require structural separation.

7. Monitoring

An independent monitoring trustee or regulatory authority may supervise compliance.

27. Six Key Case-Law Principles

Additional relevant Indian authorities include the WhatsApp privacy-policy proceeding, Flipkart proceedings, and Google's separate Play Store proceedings.

28. Emerging Issue: Platforms as "Private Regulators"

The most important conceptual development is the transformation of platforms from simple intermediaries into private regulators of markets.

A traditional intermediary:

connects buyer and seller.

A modern platform may:

establish entry requirements + determine visibility + control data + determine payment conditions + enforce rules + compete with participants.

Therefore, its economic role increasingly resembles:

Market infrastructure + regulator + competitor

This combination creates the possibility of regulatory conflicts of interest.

29. Competition-Law Challenges

A. Dynamic algorithms

Rules can change continuously.

B. Lack of transparency

The exact operation of algorithms may be difficult to establish.

C. Multi-sided effects

Conduct may benefit consumers on one side while harming competitors on another.

D. Innovation defence

Platforms may argue that restrictions improve:

• security;
• privacy;
• innovation;
• product quality.

E. Rapid technological change

Competition investigations may take years while platform markets can change within months.

F. Global ecosystems

The same platform rules may operate across numerous jurisdictions.

30. Indian Position

India's competition-law framework is particularly relevant because Section 4 already captures several forms of platform rulemaking.

The important concepts include:

• unfair/discriminatory conditions;
• denial of market access;
• limiting technical development;
• supplementary obligations;
• leveraging;
• abuse of dominance.

The CCI's digital-platform decisions demonstrate an increasing willingness to examine ecosystem effects, network effects, platform interdependencies and conduct occurring through platform rules. The Google Android and MakeMyTrip proceedings are particularly illustrative.

The 2025 NCLAT decision concerning Google's Play Store practices further demonstrates that platform-rule cases can involve detailed appellate scrutiny of both liability and remedies.

31. Conclusion

Private rulemaking power is becoming one of the central competition-law issues in platform economies.

Platforms require internal rules to operate efficiently. Therefore, the mere existence of platform rules does not establish an infringement.

The competition concern arises where a platform with substantial market power can use those rules to:

• exclude competitors;
• favour its own services;
• discriminate among business users;
• restrict interoperability;
• control access to data;
• impose restrictive commercial conditions;
• manipulate ranking;
• tie complementary services; or
• extend dominance into adjacent markets.

The key transformation is from:

"Platform as intermediary"

to:

"Platform as rulemaker, gatekeeper and competitor."

Cases such as Google Shopping, Google Android, Amazon Marketplace, FTC v Amazon, MakeMyTrip–GoIbibo–OYO, and Google Play Store/Android in India demonstrate different dimensions of this problem.