Competition Law and Strategic Foresight: Platform Market Power

1. Introduction

Strategic foresight in competition law refers to the use of forward-looking economic, technological and regulatory analysis to identify how present conduct by a digital platform may affect future competition. It is particularly important where markets are characterized by network effects, data accumulation, artificial intelligence, ecosystem integration, interoperability barriers, switching costs and rapid technological change.

Traditional competition law often asks whether an undertaking has market power today. A strategic-foresight approach additionally asks:

• How might the platform's market power develop?
• Can network effects make today's small advantage self-reinforcing?
• Can control over data or infrastructure become an essential competitive advantage?
• Can a platform use one market to entrench itself in another?
• Will interoperability restrictions prevent future competitors from emerging?
• Can acquisitions of nascent competitors eliminate future competitive constraints?
• How should competition authorities distinguish legitimate innovation from strategic exclusion?

Platform markets therefore require competition analysis that considers dynamic competition, not merely current market shares.

2. Meaning of Platform Market Power

A platform generally facilitates interactions between two or more groups, such as:

• consumers and sellers;
• advertisers and users;
• app developers and consumers;
• drivers and passengers;
• merchants and payment users;
• content creators and viewers;
• businesses and cloud-computing customers.

Platform market power may arise from several mutually reinforcing mechanisms.

A. Direct network effects

The value of the platform increases as more users join.

For example:

More users → greater platform value → more users → greater value.

B. Indirect network effects

Growth on one side attracts participants on another side.

For example:

More consumers → more sellers → greater product variety → more consumers.

C. Data advantages

Large platforms may collect extensive behavioural, transaction and search data. Data can improve:

• search results;
• recommendations;
• advertising;
• pricing;
• fraud detection;
• AI models.

This can create a feedback loop:

More users → more data → better service → more users.

D. Switching costs

Users may accumulate:

• transaction histories;
• contacts;
• digital purchases;
• reputation scores;
• playlists;
• cloud data;
• business integrations.

The cost of moving to another platform can therefore protect incumbent market power.

E. Ecosystem effects

A platform may connect multiple services, such as:

Search → advertising → browser → operating system → app store → payments → cloud → AI.

Competition concerns can arise when control over one component is used to reinforce another.

3. Strategic Foresight and Dynamic Competition

Traditional analysis can be represented as:

Market definition → market share → market power → conduct → effects

Strategic foresight adds:

Current position → technological trajectory → network effects → ecosystem expansion → future competitive constraints → possible foreclosure

This is especially relevant where today's conduct could produce irreversible or difficult-to-reverse competitive effects.

For example, a platform might not yet possess overwhelming market power in an emerging AI market. But preferential access to data, computing infrastructure, distribution channels or users could potentially give it an enduring advantage.

The purpose of foresight is not to punish successful innovation. Instead, it is to examine whether competitive advantages result from legitimate innovation or from exclusionary strategies that reduce the possibility of future competition.

4. Legal Framework

Platform market power can be examined under several competition-law doctrines.

A. Abuse of dominance

In the EU, Article 102 TFEU prohibits abuse of a dominant position.

Potential platform abuses include:

• self-preferencing;
• tying;
• discriminatory access;
• refusal to interoperate;
• exclusivity;
• predatory pricing;
• exploitative data practices;
• discriminatory ranking;
• restrictions on multi-homing.

B. Sherman Act

In the United States, Sections 1 and 2 of the Sherman Act are particularly relevant.

Section 2 concerns:

• monopolization;
• attempted monopolization;
• maintenance of monopoly power through exclusionary conduct.

C. Merger control

Strategic foresight is particularly important for acquisitions involving:

• start-ups;
• nascent competitors;
• data-rich companies;
• emerging technologies;
• complementary platforms.

A transaction may deserve scrutiny even when the target has relatively little current revenue if it represents a potential future competitive constraint.

D. Digital competition regulation

Modern digital competition regimes increasingly address platform-specific conduct through rules concerning:

• gatekeepers;
• interoperability;
• data portability;
• self-preferencing;
• app-store restrictions;
• business-user access;
• switching.

5. Major Case Laws

1. United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001)

Facts

Microsoft possessed substantial power in the market for Intel-compatible PC operating systems. It engaged in various practices concerning web browsers and distribution channels, including restrictions affecting browser competition.

Legal significance

The D.C. Circuit recognized that Microsoft had used its operating-system position to restrict competitive threats.

The case is particularly significant for strategic foresight because the court considered the relationship between:

existing monopoly power + emerging technological threat + exclusionary conduct

The browser represented a potential technological development that could weaken Microsoft's operating-system position.

Strategic-foresight principle

Competition authorities should consider whether an incumbent is attempting to prevent an emerging technology from becoming a future competitive constraint.

Platform relevance

Modern examples may include:

• operating systems;
• browsers;
• app stores;
• cloud platforms;
• AI assistants.

6. United Brands Company v Commission, Case 27/76

Facts

United Brands was found to possess a dominant position concerning bananas and engaged in conduct including discriminatory treatment of certain customers and other exclusionary practices.

Principle

The Court of Justice explained the concept of dominance as a position of economic strength enabling an undertaking to behave to an appreciable extent independently of competitors, customers and consumers.

Strategic significance

The case provides an important foundation for understanding market power as economic strength, rather than merely market share.

Platform relevance

For platforms, economic strength may derive from:

• network effects;
• ecosystem control;
• data;
• user lock-in;
• infrastructure;
• technological advantages.

Therefore, a platform's market power should not necessarily be assessed by looking exclusively at revenue or market share.

7. Bronner v Mediaprint, Case C-7/97

Facts

Bronner concerned access to a newspaper-delivery system controlled by another undertaking.

Principle

The Court established stringent conditions for treating refusal of access to infrastructure as abusive.

Among the important considerations were whether access was indispensable and whether duplication was practically or economically possible.

Strategic-foresight significance

The case is important for platform infrastructure because today's platform infrastructure may become tomorrow's competitive bottleneck.

Examples include:

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

Foresight question

The regulator must ask:

Is the infrastructure merely convenient, or is control over it capable of preventing effective future competition?

8. Google Shopping — Google Search (Shopping), Case AT.39740

Facts

The European Commission found that Google had abused its dominant position in general search by favouring its own comparison-shopping service in search results.

The case concerned the relationship between Google's general search service and competing comparison-shopping services.

Principle

The case demonstrated how a dominant platform controlling an important gateway can influence competition in adjacent markets.

Strategic-forsight significance

A platform may use an established position in one market to influence the competitive development of another.

The dynamic mechanism can be represented as:

Dominant gateway → preferential visibility → increased traffic → stronger position in adjacent market → reduced opportunities for rivals

Platform lesson

Competition analysis should therefore consider:

• ranking;
• visibility;
• traffic allocation;
• algorithms;
• self-preferencing;
• access to users.

9. Google Android, Case AT.40099

Facts

The European Commission examined Google's conduct concerning the Android mobile ecosystem, including arrangements relating to:

• Google Search;
• Chrome;
• Play Store;
• Android device manufacturers;
• mobile application distribution.

The Commission found several forms of abusive conduct.

Strategic significance

The case illustrates the importance of ecosystem power.

A platform may not rely upon a single product. Instead, several interconnected products can reinforce each other.

For example:

Operating system → app store → default applications → search → advertising → data

This creates a potential ecosystem feedback loop.

Strategic-forsight principle

Competition authorities should examine whether contractual or technical restrictions make it increasingly difficult for competitors to establish an alternative ecosystem.

10. Google AdSense, Case AT.40411

Facts

The European Commission examined contractual restrictions imposed by Google concerning the placement of search advertisements on third-party websites.

Principle

The case concerned the use of contractual arrangements to restrict competition from rival online advertising intermediation services.

Strategic relevance

Advertising platforms demonstrate how data, distribution and monetisation can reinforce one another.

A platform can potentially acquire:

• more users;
• more advertiser demand;
• more data;
• better targeting;
• greater revenue;
• greater ability to invest.

This creates a self-reinforcing competitive cycle.

Foresight implication

Competition analysis should examine whether contractual restrictions prevent competing advertising technologies from developing sufficiently to become meaningful future constraints.

11. Qualcomm v European Commission, Case C-428/19 P

Facts

The case concerned Qualcomm's rebate arrangements and their relationship with competition in the baseband-chip market.

The Court of Justice addressed the analysis of exclusionary rebates and the need to assess their capability to produce anticompetitive effects.

Strategic significance

The case is useful beyond the semiconductor sector because technology platforms frequently use:

• rebates;
• exclusivity arrangements;
• loyalty incentives;
• bundled pricing.

Platform lesson

The relevant question is not simply:

"Does the platform give customers a discount?"

It is also:

"Could the commercial structure make it substantially harder for competitors to achieve sufficient scale?"

This is particularly important in markets characterized by strong network effects.

12. Ohio v. American Express Co., 585 U.S. 529 (2018)

Facts

The United States Supreme Court considered American Express's anti-steering provisions in a two-sided transaction platform.

Principle

The Court emphasized the two-sided character of the credit-card market and considered effects on both sides of the platform.

Strategic significance

This case is particularly important for platform economics because it demonstrates that competition analysis may need to account for interdependent sides of a platform.

Platform relevance

Examples include:

• payment platforms;
• marketplaces;
• advertising platforms;
• app stores;
• ride-sharing platforms.

A restriction affecting one side can influence incentives and competition on the other.

13. Apple Inc. v. Pepper, 587 U.S. 273 (2019)

Facts

Consumers alleged that Apple's App Store practices resulted in anticompetitive pricing.

The Supreme Court addressed whether consumers purchasing apps through the App Store could pursue antitrust claims against Apple.

Significance

The case highlights the importance of identifying the economic role of a platform.

Apple can simultaneously function as:

• technology provider;
• operating-system provider;
• app-store operator;
• payment intermediary;
• distributor.

Strategic-forsight relevance

Vertical integration can give a platform the ability to control multiple stages of distribution.

This raises questions about:

• access;
• commissions;
• payment restrictions;
• app distribution;
• alternative payment systems;
• interoperability.

14. Epic Games, Inc. v. Apple Inc.

Facts

Epic Games challenged Apple's App Store restrictions, particularly those concerning payment systems and distribution.

The litigation examined the competitive implications of Apple's App Store rules.

Strategic significance

The dispute illustrates the importance of platform governance rules.

Platform operators create rules determining:

• who can enter;
• what products can be offered;
• how users discover products;
• which payment mechanisms can be used;
• what commissions apply.

Foresight principle

Platform rules should be examined not only for their immediate effects but also for whether they determine the future structure of an ecosystem.

15. Strategic Foresight Framework for Platform Market Power

A competition authority can use a six-stage framework.

Stage 1 — Identify the platform

Determine:

• platform function;
• user groups;
• intermediated transactions;
• complementary products.

Stage 2 — Identify sources of market power

Examine:

• market share;
• network effects;
• switching costs;
• data;
• intellectual property;
• infrastructure;
• ecosystem integration.

Stage 3 — Identify the competitive trajectory

Ask:

• Is the market growing?
• Are users increasingly locked in?
• Is data becoming more valuable?
• Are competitors emerging?
• Is interoperability declining?

Stage 4 — Examine strategic conduct

Potential concerns include:

• self-preferencing;
• tying;
• bundling;
• exclusivity;
• discriminatory access;
• algorithmic ranking;
• interoperability restrictions;
• data leveraging;
• predatory pricing;
• acquisitions of nascent competitors.

Stage 5 — Assess future foreclosure

The regulator should consider whether conduct could:

1. prevent entry;
2. weaken rivals;
3. increase switching costs;
4. reduce multi-homing;
5. strengthen network effects;
6. eliminate potential competitors.

Stage 6 — Assess remedies

Possible remedies include:

• interoperability;
• data portability;
• non-discrimination obligations;
• access obligations;
• prohibition of self-preferencing;
• structural separation;
• behavioural commitments;
• divestiture in appropriate merger cases.

16. Platform Market Power and the "Tipping" Problem

One of the most important strategic-forsight concepts is market tipping.

A market may initially contain several competitors:

Platform A ↔ Platform B ↔ Platform C

But network effects can produce:

More users → more suppliers → greater functionality → more users

Eventually:

Large installed base → greater attractiveness → further user acquisition

This can result in rapid concentration.

Therefore, intervention occurring only after a platform becomes overwhelmingly dominant may be difficult to reverse.

This creates a central tension:

Early intervention may prevent future foreclosure, while excessive intervention may interfere with legitimate innovation.

Strategic foresight attempts to manage this tension through evidence-based assessment of likely competitive trajectories.

17. Data as a Source of Platform Power

Data may contribute to market power in several ways.

Data feedback loop

Users

↓

Transactions

↓

Data

↓

Analytics / AI

↓

Better service

↓

More users

The competition issue becomes more significant when rivals cannot obtain comparable data through reasonable means.

Relevant questions include:

• Is the data replicable?
• Is it exclusive?
• Can consumers port it?
• Can competitors obtain equivalent information?
• Does the platform combine data across markets?
• Does the data improve an algorithmic advantage?

18. Artificial Intelligence and Future Platform Power

Strategic foresight becomes especially important in AI-driven platform markets.

Future market power may arise from control over:

• computing infrastructure;
• foundation models;
• training data;
• proprietary datasets;
• distribution channels;
• cloud infrastructure;
• AI assistants;
• app ecosystems;
• developer ecosystems.

Potential competitive feedback loop:

Cloud infrastructure → AI model → applications → users → data → improved AI → more applications

Competition authorities therefore need to distinguish between:

Legitimate economies of scale

and

Artificially reinforced barriers to entry.

19. Potential Competition and Nascent Competitors

Traditional market-share analysis may overlook a start-up that has:

• limited revenue;
• few users;
• negative profits;
• immature technology.

Yet it might possess technology capable of becoming a substantial competitive constraint.

Strategic foresight therefore asks:

What competitive role could this undertaking realistically play if allowed to develop?

This is particularly important in merger control.

Relevant evidence can include:

• internal business documents;
• investment plans;
• customer switching patterns;
• technological roadmaps;
• R&D capability;
• intellectual property;
• developer adoption;
• evidence of competitive responses.

20. Strategic Foresight and Essential Facilities

Digital platforms increasingly resemble infrastructure.

Examples may include:

• app stores;
• payment networks;
• cloud infrastructure;
• operating systems;
• digital identity;
• interoperability interfaces;
• online marketplaces.

The Bronner line of jurisprudence demonstrates the importance of indispensability before imposing access obligations.

Strategic foresight adds another question:

Could control over this infrastructure prevent the development of a competitive ecosystem in the future?

21. Key Competition Concerns

22. Strategic Foresight vs Traditional Competition Analysis

Traditional approach

Present market

→ Current market share

→ Existing competitors

→ Existing consumer harm

Strategic-foresight approach

Present market

→ Technology trajectory

→ Network effects

→ Data accumulation

→ Ecosystem expansion

→ Potential competitors

→ Market tipping

→ Future competitive structure

The latter does not replace conventional competition law. Rather, it supplements it where technological change makes static analysis inadequate.

23. Six Core Lessons From the Case Law

The cases collectively demonstrate several important principles:

1. Microsoft — dominant platforms can use existing infrastructure to suppress emerging competitive threats.
2. United Brands — market power concerns economic independence and strength, not merely numerical market share.
3. Bronner — access to infrastructure requires careful assessment of indispensability and replicability.
4. Google Shopping — control of a digital gateway can influence competition in adjacent markets.
5. Google Android — ecosystem integration can reinforce platform power across interconnected markets.
6. Google AdSense — contractual restrictions can protect and reinforce platform advantages.
7. Ohio v. American Express — two-sided platform economics may require consideration of interdependent market sides.
8. Apple v. Pepper / Epic Games v. Apple — app-store governance demonstrates how platform rules can influence access, distribution and payment competition.

24. Conclusion

Strategic foresight and platform market power represent an increasingly important dimension of modern competition law. Digital platforms can obtain durable competitive advantages through network effects, data, ecosystems, interoperability control, switching costs and vertical integration.

The central analytical shift is from asking only:

"Does the platform have market power today?"

to also asking:

"What mechanisms could cause today's competitive advantage to become tomorrow's entrenched market power?"

The jurisprudence of Microsoft, United Brands, Bronner, Google Shopping, Google Android, Google AdSense, Qualcomm, Ohio v. American Express, Apple v. Pepper and Epic Games v. Apple provides important building blocks for this analysis.

A well-designed strategic-foresight approach should nevertheless remain evidence-based and economically grounded. It should not assume that growth, innovation, data accumulation or ecosystem integration is itself unlawful. The crucial issue is whether specific conduct creates or reinforces barriers to effective competition, forecloses actual or potential rivals, or makes competitive entry and expansion materially more difficult.

Thus, strategic foresight enables competition law to address the distinctive problem of digital markets: the possibility that a relatively small competitive advantage today can, through network effects and ecosystem feedback, become a durable source of market power tomorrow.