Abuse of Dominance in the Digital Economy: The Invisible Power of Platforms

"In the world of bits and bytes, dominance is invisible - until it chokes innovation."

This thought-provoking line captures the defining competition law challenge of our time: how to detect and restrain economic power that is algorithmic, data-driven, and hidden beneath the user interface.

In contrast to industrial monopolies that controlled oil fields or factories, today's digital giants dominate through code, data, and design. They act as invisible gatekeepers deciding who enters the market, what users see first, and which competitors are allowed visibility.

At Apar Law, our deep expertise in competition and technology law helps clients navigate this evolving frontier. This article explores the legal contours of abuse of dominance by digital platforms, how abuse manifests through technology, and offers a strategic toolkit for startups, in-house counsels, and businesses to respond effectively in India and beyond.

Why Abuse of Dominance Matters

Traditional competition law arose in an economy of tangible assets such as factories, supply chains, and distribution networks. But in the digital sphere, power flows through data and network effects. Each new user amplifies a platform's value, making dominance self-reinforcing.

Economists call this the network effect: once a platform reaches critical scale, new entrants face steep barriers. Few users will join an empty social network, and search engines grow smarter with every query, locking in user preference.

The OECD's 2021 Report on Abuse of Dominance in Digital Markets warns that such feedback loops can convert small advantages into durable monopolies. Thus, regulators must look beyond price and production, focusing instead on control over data, algorithms, and digital access.

The Legal Foundations

Dominant Position

Under Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Section 4 of India's Competition Act, 2002, a dominant position refers to the power to act independently of competitive constraints.In the digital domain, this power derives from controlling ecosystems — app stores, marketplaces, and search engines — rather than physical assets. Platforms that act as intermediaries between consumers and suppliers often hold bottleneck monopolies.

Abuse of Dominance

Abuse arises when a dominant enterprise exploits consumers or forecloses competitors.Classic forms include:

• Exclusionary abuses: refusal to deal, predatory pricing, or tying.

• Exploitative abuses: unfair pricing or contractual terms.

• Leveraging abuses: extending market power into adjacent sectors.

In the digital realm, these have evolved into subtler forms:

• Self-preferencing (e.g., Google Shopping case in the EU).

• Data foreclosure, denying access to essential datasets.

• Algorithmic discrimination, where ranking systems suppress competition.

• Tying and bundling, such as Google's Android pre-installation case before India's CCI.

Such practices seldom raise prices; instead, they invisibly distort competition through code.

Enforcement Challenges in Digital Markets

Defining the Market

Traditional tests like the SSNIP model rely on prices, yet most digital services are "free." Regulators now use non-price factors such as user attention, data control, or switching costs. Is WhatsApp competing with Telegram or with email? These definitional ambiguities complicate enforcement.

Balancing Innovation and Intervention

Act too soon, and regulators risk stifling innovation; act too late, and monopolies may harden. The pace of technological evolution demands agile yet prudent oversight.

Evidence and Opaqueness

Proving digital abuse requires technical insight into algorithms and data logs often protected as trade secrets. Institutions worldwide, including the OECD, urge competition authorities to build technical capacity and algorithmic audit tools.

Designing Remedies

Structural remedies like breakups may overshoot the harm, while behavioural remedies demand constant monitoring. Increasingly, jurisdictions favour ex ante regulation, preventing abuse before it occurs.

Global Approaches

European Union: The Digital Markets Act

The EU's Digital Markets Act (2022) pioneers a preventive framework targeting "gatekeepers" by prohibiting self-preferencing, mandating data portability, and ensuring interoperability. Penalties can reach 10% of global turnover, signaling a shift from ex post to ex ante regulation.

United States: Litigation-Driven Evolution

American enforcement remains case-base as seen in United States v. Google and FTC v. Meta. Focus lies on exclusionary agreements and innovation harm, shaping antitrust law through judicial precedent.

Asia-Pacific and OECD Initiatives

From Japan's Digital Platform Transparency Act (2021) to Australia's ACCC inquiries, regional authorities are adapting global principles to local dynamics. The OECD promotes hybrid regimes that integrate competition, consumer, and data protection frameworks.

The Indian Context

Evolving Legal Landscape

Section 4 of the Competition Act, 2002 prohibits abuse of dominance. Amendments in 2023 introduced deal-value thresholds and speedier digital sector investigations — recognizing that market power today lies in data, not assets.

Landmark Cases

• Matrimony.com v. Google (2018): Matrimony.com, an online matrimonial service, initiated a complaint against Google for search bias and unfair ranking practices that allegedly favored Google's own services. The Competition Commission of India (CCI) fined Google ₹136 crore, demonstrating how algorithmic manipulation can distort competitive fairness.

• Umar Javeed v. Google (Android) (2022): This case was initiated by an individual complainant who challenged Google's mandatory pre-installation of apps on Android devices as abusive tying and bundling practices. The CCI held this practice as an abuse of dominance, finding that device manufacturers were effectively forced to pre-install Google's suite of apps, foreclosing competition from rival app developers.

• MakeMyTrip & OYO Case (2022): MakeMyTrip and OYO faced allegations from smaller hotel operators that the platforms engaged in exclusive arrangements, disadvantaging smaller competitors in the hotel booking market. The case highlighted concerns over preferred seller programs that create barriers for independent hoteliers trying to reach consumers directly.

• Google AdTech Case (2024): This ongoing inquiry by the CCI focuses on Google's role in ad intermediation, examining whether Google's integrated control over multiple layers of the digital advertising stack creates conflicts of interest that harm advertisers, publishers, and ultimately consumers through reduced choice and inflated costs.

Together, these cases highlight CCI's increasing engagement with complex digital issues, while also underscoring the need for enhanced technical and institutional capacities.

Institutional Challenges

Despite progress, the CCI needs deeper technical expertise and stronger coordination with digital regulators. Scholars suggest establishing a Digital Markets Unit with multidisciplinary capabilities.

Strategic Toolkit for Businesses

Red Flags of Potential Abuse

Behaviour	Why It's Risky	Example
Unfair defaults	Locks users in	Non-removable pre-installed apps on smartphones, like Microsoft's Internet Explorer browser once came pre-installed and unremovable, leading to antitrust probes for suppressing competitor browsers such as Netscape.
Self-preferencing	Suppresses competitors	Amazon's promotion of its private label brands like "Amazon Basics" and "Amazon Essentials" over competing third-party products. The European Commission found that Amazon used third-party seller data to identify successful products, then created competing versions under its own brands and placed them prominently in search results​. Similarly, Google was fined €2.42 billion for prioritizing Google Shopping over rival comparison services​.
Tying/Bundling	Limits consumer choice	Google's mandatory pre-installation of its apps on Android devices, challenged by the CCI in India. Amazon's requirement that sellers use its logistics services to qualify for "Prime" status creates similar bundling concerns​.
Data foreclosure	Blocks interoperability	Amazon's refusal to share seller performance data with competing marketplaces, effectively locking merchants into its ecosystem and preventing them from easily switching to rival platforms​.
Unilateral changes	Exploitative	Sudden spikes in commissions charged by e-commerce marketplaces, affecting sellers' profitability. Amazon has faced scrutiny for abruptly changing seller fees and policies without adequate notice or justification​.

Diagnostic Checklist for Businesses

Ask:

• Is over 30% of your revenue linked to one platform?

• Can you switch providers without data loss?

• Do you know how visibility is determined?

• Are similarly placed vendors treated equally?

A "yes" to structural dependence means heightened regulatory risk.

Strategic Response

1. Document early signs - maintain records of exclusionary behaviour.

2. Engage formally - cite CCI precedents in communications.

3. Escalate - file information before the CCI under Rule 10.

4. Collaborate - collective complaints strengthen scrutiny.

For Dominant Firms

• Conduct independent audits of algorithms and data sharing.

• Avoid merging datasets across markets without consent.

• Train teams on Section 4 compliance.

• Adopt a Fair Platform Charter to institutionalize fairness by design.

Apar Law routinely advises enterprises on implementing such frameworks to preempt risk and align commercial innovation with regulatory compliance.

The Way Forward

In the digital age, market dominance is not about output or pricing , it's about controlling access, data, and visibility. Abuse of dominance thus becomes an infrastructure problem disguised as a market one.

Policymakers must institutionalize foresight, equipping regulators with technologists and economists alongside lawyers. For businesses and counsel, compliance must move upstream, embedded within product design, not retrofitted after disputes arise.

As the OECD aptly noted, "The challenge is not identifying dominance, but illuminating how it hides in plain sight."

At Apar Law, we remain at the forefront of this illumination partnering with clients to ensure growth through innovation, not exploitation.