Ecosystems and competition law in theory and practice

Jacobides, M G and Lianos, I (2021) Ecosystems and competition law in theory and practice. Industrial and Corporate Change, 30 (5). pp. 1199-1229. ISSN 0960-6491

Abstract

One of the most profound changes in the industrial landscape in the last decade has been the growth of business ecosystems—groups of connected firms, drawing on (digital) platforms that leverage their complementors and lock in their customers, exploiting the “bottlenecks” that emerge in new industry architectures. This has created new asymmetries of power, where the “field” of competition is not the relevant product market, as is usually the case in competition law, but rather the ecosystem of various complementary products and associated complementor firms. These dynamics raise novel concerns over competition. After examining the foundational elements of the ecosystem concept, we review how ecosystems are addressed within the current scope of competition law and identify the gap in the existing framework of conventional competition law. We then move to a critical review of current efforts and proposals in the European Union for providing regulatory remedies for ex ante and ex post resolution of problems, focusing on the current (2020) proposals of the Digital Market Act on ex ante regulation, with its particular focus on “gatekeepers.” We also review recent regulatory initiatives in European countries that focus on ex post regulation and on the role of business models and ecosystem architectures in regulation before providing a deep dive into proposed Greek legislation that explicitly focuses on ecosystem regulation. We conclude with our observations on the challenges in instituting and implementing a regulatory framework for ecosystems, drawing on research and our own engagement in the regulatory process.