Market power in modern economies extends beyond the sale of a single good or service. It often rests on the ability to coordinate activities across a network of related products, services, and information flows that together become more valuable than the sum of their parts. When firms own or tightly control complementary assets—those assets that enable product use or enhance its value—they can lock in customers, raise switching costs, and deter rivals from entering. Regulators therefore need to examine not only pricing or output but also the architecture of ecosystems, the distribution rights that sustain them, and the strategic incentives that maintain network effects over time.
A rigorous evaluation starts with mapping the ecosystem map: identifying core products, the adjacent services, data assets, and technical standards that sustain user engagement. This requires assessing how tightly interwoven the ecosystem is, whether access to crucial tools is exclusive, and how dependent competitors become on the platform’s rules and interfaces. If an entrant can offer a comparable bundle, but must recreate a decoupled or inferior ecosystem, entry barriers rise, and market power strengthens for the incumbent. Analysts should also assess how governance choices—such as terms of service, compatibility commitments, and developer access—affect potential rivalry and the speed at which competitors can replicate value.
Entrenched advantages require careful, multi-faceted assessment across platforms.
Evaluating market power requires examining price, output, and welfare effects as well as non-price adjustments that influence competition long after a product launch. Complementary assets, including data networks, API ecosystems, and interoperability standards, give the leading firm leverage that is not captured by traditional anti-cartel metrics alone. The question becomes whether the incumbent’s control over these assets reduces consumer surplus through higher fees, limits innovation by other players, or suppresses dynamic competition by discouraging experimentation. Agencies should therefore quantify the degree of control and its impact on consumer choices, as well as how the ecosystem shapes alternative offerings and potential substitutes.
Another key focus is the durability of the advantage. If the ecosystem creates self-reinforcing loops—more users attract more developers, more developers attract better services, and better services attract more users—the result can be entrenched market power that resists straightforward competition. Regulators must analyze not only current dependencies but also likely future evolutions: platform governance changes, shifts in data ownership, and potential decoupling scenarios. The critique is not against vibrant platforms per se, but against configurations that systematically foreclose reasonable competition across adjacent markets.
Evaluating non-price dimensions of power across complex ecosystems.
The assessment framework should include a forward-looking perspective on consumer harm and market dynamics. This means evaluating how control over complementary assets influences price discrimination, service quality, and access to essential features. When a single firm can impose terms that shape the entire ecosystem, rivals may be discouraged from investing in innovation, fearing limited returns. Antitrust analysis must therefore consider the potential for standard-setting power, exclusive data flows, and preferential access to vital interfaces as obstacles to rival development. The goal is to determine whether the ecosystem structure sustains durable, non-transitory advantages that hamper competition and consumer welfare.
In practice, investigators should gather qualitative insights from market participants about interoperability constraints and switch costs. Quantitative indicators—such as patterns of cross-licensing, renewal rates, and concentration in adjacent markets—offer measurable signals of power. However, understanding the qualitative dimensions of platform control, including governance transparency, fairness of rules, and the ease with which new entrants can gain traction, is equally important. The combination helps determine whether current practices amount to legitimate competitive governance or structural manipulation that entrenches incumbent dominance.
Measuring ecosystem power with both theory and evidence.
As markets evolve, the line between platform governance and market manipulation can blur. An essential task for evaluators is to distinguish legitimate product governance from strategic choke points that wall off competition. For example, exclusive access arrangements with essential suppliers, or bundled offerings that force customers into a single ecosystem, can reduce alternative choices. Regulators should examine how these practices affect innovation incentives, consumer choice diversity, and the feasibility of viable substitutes. The analysis must account for the potential for dynamic efficiencies, yet resist justified growth that overshadows consumer welfare.
A central question concerns what constitutes reasonable interoperability. When a dominant platform imposes rigid data formats, prohibitive API constraints, or delayed licensing, rivals face higher costs to replicate functionality. Assessors should quantify the burden of these barriers and compare them with the benefits of maintaining secure, stable, and innovative ecosystems. If interoperability gaps consistently disadvantage smaller competitors while preserving overall platform health, the assessment should flag the concern and explore remedies that preserve competition without destabilizing beneficial network effects.
Toward balanced, effective governance of market power.
A thorough inquiry also considers how ecosystem control affects entry timing and exit dynamics. When potential entrants must invest heavily upfront to reach parity with the incumbent’s network effects, they may delay or abandon market entry altogether. The regulator’s challenge is to estimate the perceived cost of entry relative to expected benefits, including the probability of achieving scale. If the incumbent’s ecosystem creates a credible moat that dissuades investment, the market may drift toward reduced innovation, slower product improvement, and diminished consumer welfare over time.
Remedies and policy tools should be tailored to the ecosystem’s architecture. Rather than focusing solely on price or market share, policymakers can target access terms, interoperability requirements, or structural separations designed to restore contestability. Such measures must carefully calibrate to preserve beneficial network effects while reducing anti-competitive leverage. Tools range from mandated open interfaces and data portability to conditional licenses and sunset clauses for exclusive arrangements. The objective is to reintroduce dynamic competition without destroying the ecosystem’s value proposition.
Finally, evaluating market power in ecosystems requires a principled framework that respects both innovation and competition. Regulators should adopt a holistic lens that accounts for data flows, user empowerment, and the alignment of incentives across participants. Rather than treating ecosystems as a single blunt instrument, authorities can identify specific choke points, map dependency chains, and target remedies that restore choice without eliminating beneficial collaboration. Transparent assessment processes, clear standards, and regular review cycles help ensure sustained accountability and proportional responses to evolving market conditions.
In diverse markets, convergence toward more open, interoperable ecosystems can enhance welfare while still enabling firm-led innovation. The key is to distinguish temporary competitive advantages from durable market power and to pursue remedies that promote contestability and consumer choice. By focusing on governance structures, accessibility, and the distribution of benefits across participants, antitrust authorities can foster healthier competition in ecosystems without undermining the incentives that drive technological progress. This balanced approach supports both consumer welfare and ongoing innovation in a rapidly changing digital environment.
