1. Introduction

Chained digital services refer to a business model in which several digital services are connected sequentially or functionally so that use of one service encourages, facilitates, or conditions access to another. The chain may involve an operating system → app store → payment service → browser → search engine → advertising service, or a platform → identity service → cloud storage → productivity application.

Examples include:

• operating system + app store + payment system;
• search engine + browser + advertising platform;
• smartphone + cloud storage + messaging + app distribution;
• e-commerce marketplace + logistics + payment + advertising;
• social-media platform + identity + messaging + marketplace;
• cloud infrastructure + software + data analytics + AI services.

The competition-law concern is not simply that services are technically integrated. Integration can create efficiencies, lower transaction costs and improve user experience. The concern arises where a firm with substantial market power uses one service in the chain to foreclose competitors, raise switching costs, extend dominance into adjacent markets, exploit data advantages, or make independent alternatives commercially unviable.

Modern digital ecosystems therefore require competition authorities to examine the whole chain, rather than treating every digital service as an isolated market.

2. Meaning and Characteristics of Chained Digital Services

A chained digital service generally contains three or more interconnected layers:

Layer 1 – Infrastructure/Gateway

• operating system;
• cloud infrastructure;
• app store;
• browser;
• payment infrastructure.

↓

Layer 2 – Intermediate service

• search;
• identity/authentication;
• advertising;
• communications;
• data analytics.

↓

Layer 3 – Consumer or business service

• shopping;
• streaming;
• gaming;
• financial services;
• AI;
• productivity software.

The competitive significance comes from the links between the layers.

For example:

Smartphone → operating system → app store → payment system → app → advertising/data

Control at an upstream level can therefore influence competition at several downstream levels.

3. Relevant Competition-Law Framework

A. Abuse of Dominance

The principal legal theory is abuse of dominance.

EU

Article 102 TFEU prohibits abuse of a dominant position.

Relevant forms include:

• tying and bundling;
• discriminatory conditions;
• refusal or restriction of access;
• exclusionary conduct;
• leveraging dominance into neighbouring markets;
• self-preferencing;
• exploitative or exclusionary data practices.

India

The principal provisions are Sections 4(1) and 4(2) of the Competition Act, 2002.

Particularly relevant are:

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

For chained digital services, Section 4(2)(e) is particularly significant.

4. Tying and Bundling

The most obvious competition issue is digital tying.

A firm may possess dominance in Service A and require or strongly induce customers to use Service B.

For example:

Dominant operating system → compulsory app store → compulsory payment mechanism.

The legal analysis normally asks:

1. Are the two services distinct?
2. Is the undertaking dominant in the tying market?
3. Is access to the tying service conditioned upon acceptance of the tied service?
4. Does the arrangement have foreclosure effects?
5. Are there objective or technical justifications?
6. Are there efficiencies benefiting consumers?
7. Are less restrictive alternatives available?

Digital markets make the analysis more complicated because services can simultaneously be complements, components and independent products.

5. Leveraging Across Digital Chains

Leveraging occurs when market power in one market is used to strengthen a firm's position in another.

A simplified chain is:

Dominant operating system → app store → payment → downstream applications

The undertaking does not necessarily need to monopolise every layer.

Instead, dominance at an important gateway layer can give it strategic control over neighbouring markets.

This creates several possible forms of foreclosure:

• preventing rival services from accessing users;
• imposing technical restrictions;
• requiring use of proprietary payment systems;
• restricting interoperability;
• preferentially displaying the firm's own service;
• using downstream data to compete against dependent businesses;
• imposing discriminatory commissions;
• restricting multi-homing.

6. Network Effects and Chained Services

Digital chains frequently exhibit direct and indirect network effects.

For example:

More users → more developers → more applications → more users.

If the platform controls several connected services, network effects can operate simultaneously across multiple markets.

A rival entering one market may therefore face a disadvantage not because its individual product is inferior, but because the incumbent can leverage its entire ecosystem.

This can create ecosystem-level barriers to entry.

7. Switching Costs

Chained services can make switching particularly difficult.

A consumer may theoretically be able to replace one service but not the entire chain.

For example:

Operating system → cloud account → purchased applications → payment history → stored data → subscriptions.

Leaving the ecosystem may require:

• transferring data;
• changing accounts;
• replacing applications;
• losing accumulated content;
• changing payment arrangements;
• learning a new interface;
• abandoning social connections.

Consequently, even where individual services are technically substitutable, the ecosystem may not be easily substitutable.

8. Self-Preferencing

A chained digital ecosystem can permit a platform to favour its own downstream service.

For example:

Search engine → own shopping service
App store → own applications
Marketplace → own logistics
Cloud platform → own software
Operating system → own browser.

Self-preferencing can become particularly problematic where the platform controls the ranking, recommendation, default or access mechanism.

The European General Court's Google Shopping judgment is particularly important in this respect. The Court upheld, almost entirely, the Commission's finding that Google had abused its dominant position by favouring its own comparison-shopping service over competing comparison-shopping services.

9. Defaults and Choice Architecture

Chained services frequently exploit default settings.

A consumer may be presented with:

Device → default browser → default search engine → default advertising ecosystem.

Even when alternatives exist, the default may receive a substantial competitive advantage.

The UK CMA's mobile-ecosystem work has specifically examined how pre-installation, defaults and ecosystem rules affect competition between browsers and other services. Its investigation found competition concerns concerning mobile browsers and examined the relationship between operating systems, app distribution and browsers.

10. Interoperability and Access

A chained service can become anticompetitive when the dominant undertaking controls an essential technical interface.

Examples include:

• APIs;
• identity systems;
• payment interfaces;
• app-store APIs;
• cloud interoperability;
• messaging interoperability;
• operating-system functionality.

Potential conduct includes:

• refusing access;
• delaying access;
• providing inferior functionality;
• discriminatory access;
• changing APIs in ways that disadvantage rivals;
• restricting interoperability with competing products.

The competition analysis must distinguish legitimate security or technical requirements from restrictions that unnecessarily exclude competitors.

11. Data Advantages

Chained services can create a powerful data feedback loop.

For example:

Search data → advertising data → consumer behaviour → personalised recommendations → more users → more data.

Where a firm operates several interconnected services, it can potentially combine information generated across those services.

This may give it advantages in:

• targeting;
• ranking;
• recommendation;
• pricing;
• product development;
• advertising;
• fraud detection;
• AI training.

Competition authorities may therefore examine whether data combination or access restrictions strengthen dominance.

12. Case Laws

1. Microsoft Corp. v. Commission — Windows Media Player

European Commission / Court of First Instance, Case T-201/04 (2007)

Microsoft's Windows operating system was bundled with Windows Media Player.

The case is a foundational authority concerning technological tying.

Competition significance

The case demonstrates that integration of products into a technological system does not automatically remove the possibility of tying analysis.

The important questions include:

• whether the products are distinct;
• whether customers have meaningful choice;
• whether tying forecloses competitors;
• whether the conduct produces competitive harm;
• whether technological integration is objectively justified.

Relevance to chained digital services

Modern chains may replace:

Windows → Media Player

with:

Operating system → browser → app store → payment → cloud service.

The underlying competition concern remains the possibility of using control over one digital layer to disadvantage rivals in another.

2. Google Android — Google Search and Google Chrome

European Commission, Case AT.40099 (2018)

This is one of the most important modern examples of chained digital services.

The Commission found, among other things, that Google tied the Google Search app to the Play Store and Chrome to the Play Store and Google Search. The Commission considered these to be distinct products and concluded that the arrangements could restrict competition in general search and mobile-browser markets.

Competition significance

The case demonstrates how a chain can operate:

Android → Play Store → Google Search → Chrome → advertising.

The upstream service creates distribution advantages for downstream services.

The Commission specifically considered the competitive significance of pre-installation and the resulting status-quo bias.

Principle

Control of an important digital gateway can confer competitive advantages on several downstream services simultaneously.

3. Google Shopping

Google and Alphabet v Commission, Case T-612/17, General Court, 2021

Google operated the dominant general search engine and promoted its own comparison-shopping service more prominently than competing comparison-shopping services.

The General Court upheld almost all of the Commission's decision and the €2.42 billion fine.

Competition significance

This case illustrates leveraging plus self-preferencing.

The chain was approximately:

General search → search results → comparison shopping → online merchants.

Google's control over the upstream search gateway influenced competition in the downstream comparison-shopping service.

Principle

A dominant platform may face Article 102 scrutiny when its control over an upstream gateway gives its own downstream service preferential treatment capable of disadvantaging competitors.

4. Epic Games v. Apple

U.S. Court of Appeals for the Ninth Circuit, 2023

Epic challenged Apple's app distribution and payment restrictions.

The Ninth Circuit affirmed the district court's rejection of Epic's federal antitrust claims concerning restraint of trade, tying and monopoly maintenance, while affirming the finding against Apple's anti-steering provision under California's Unfair Competition Law.

Competition significance

The case illustrates a complex digital chain:

iOS → App Store → app distribution → in-app payment → consumer transaction.

Apple's control over app distribution was closely connected with its payment system.

Importance

The case demonstrates that technological integration and ecosystem design can be analysed simultaneously with antitrust theories, but that proving an antitrust violation requires careful market definition, competitive-effects evidence and assessment of legitimate ecosystem justifications.

5. Amazon Marketplace

CMA investigation into Amazon Marketplace, United Kingdom

The CMA investigated Amazon's use of third-party seller data, its Buy Box selection criteria and the treatment of sellers under its Prime programme. Amazon subsequently offered commitments addressing the CMA's concerns.

Competition significance

The digital chain can be represented as:

Marketplace → seller data → ranking/Buy Box → logistics → Prime → consumer purchasing.

Amazon's operation of multiple connected services potentially gives it information and distribution advantages over independent sellers.

Principle

A platform that simultaneously operates the marketplace and competes with businesses using that marketplace can create vertical and ecosystem-level conflicts of interest, particularly where platform-generated data or ranking mechanisms affect downstream competition.

6. Google Android — Tying of Chrome

The Android decision separately illustrates the significance of the browser component of the chain.

The Commission concluded that Google had tied Chrome to the Play Store and Google Search and considered that the practice gave Chrome a substantial distribution advantage while potentially weakening competing mobile browsers.

Competition significance

The chain was:

Android → Play Store/Search → Chrome → search access.

A browser is not merely another application. It can function as an important gateway to competing digital services.

Consequently, control over a browser can indirectly affect:

• search;
• advertising;
• online shopping;
• media;
• cloud services;
• AI services.

7. Servizio Elettrico Nazionale

CJEU, Case C-377/20, 2022

Although not a pure digital-services case, this decision is important for the broader doctrine of leveraging.

The Court considered whether commercially sensitive information inherited from a statutory monopoly could be used to preserve a dominant position after liberalisation.

Relevance to digital ecosystems

The principle is useful by analogy where a dominant digital platform possesses a structural informational advantage from one market and uses that advantage to protect or expand its position in another.

The crucial question is whether the conduct is competition on the merits or exclusionary leveraging.

13. Competition Concerns Created by Chained Digital Services

A. Foreclosure

The most important concern is foreclosure of competitors.

A dominant firm may make it difficult for rivals to enter a downstream market by controlling:

• distribution;
• data;
• defaults;
• payment;
• APIs;
• rankings;
• authentication;
• advertising;
• infrastructure.

B. Raising Rivals' Costs

A dominant platform may impose technical or commercial conditions that increase competitors' costs.

Examples:

• high access fees;
• mandatory commissions;
• discriminatory APIs;
• delayed certification;
• interoperability restrictions;
• expensive compliance requirements.

The rival may technically remain in the market while becoming commercially uncompetitive.

C. Ecosystem Lock-In

Lock-in occurs when consumers accumulate investments across several interconnected services.

For example:

device → account → applications → subscriptions → cloud data → payment history.

The more links a consumer has with the ecosystem, the greater the potential switching cost.

D. Reduction of Multi-Homing

Competition is generally stronger where consumers can use multiple platforms simultaneously.

Chained services can discourage multi-homing through:

• exclusivity;
• technical incompatibility;
• loyalty benefits;
• bundled discounts;
• account restrictions;
• data portability barriers.

Reduced multi-homing may strengthen network effects and entry barriers.

14. Algorithmic Competition Concerns

Chained services increasingly rely on algorithms.

Algorithms determine:

• search rankings;
• recommendations;
• prices;
• advertisements;
• app visibility;
• product placement;
• credit decisions;
• content distribution.

If the same firm controls several layers, algorithmic decisions at one layer can affect competition at another.

For example:

Search algorithm → ranking → advertising → shopping conversion → merchant data.

The competition authority should therefore examine the entire algorithmic chain, rather than evaluating each algorithm independently.

15. Dark Patterns and Choice Architecture

Chained digital services can also employ interface designs that make switching or selecting competitors difficult.

Examples include:

• preselected subscriptions;
• difficult cancellation;
• repeated prompts;
• hidden alternative services;
• confusing privacy settings;
• default payment mechanisms;
• preferential placement of affiliated services.

Competition concerns become stronger when these practices reinforce an existing dominant position.

16. Exclusive and Loyalty Arrangements

A platform may require downstream businesses to use several connected services.

For example:

Use platform advertising + platform payment + platform logistics.

The cumulative effect may be more restrictive than any individual obligation.

Authorities should therefore assess:

individual restriction + interaction with other restrictions + cumulative foreclosure effect.

17. Bundling and Zero-Price Services

Traditional price-based theories are harder to apply where services are free.

A search engine, email service or messaging service may have a zero monetary price.

Nevertheless, competition can occur through:

• data;
• attention;
• advertising;
• engagement;
• interoperability;
• quality;
• privacy;
• innovation.

Therefore, the absence of a monetary price does not automatically eliminate competition concerns.

18. Merger Control and Chained Services

Chained digital services also create important merger issues.

A transaction involving:

cloud provider + AI company

may affect several connected markets:

• cloud computing;
• AI infrastructure;
• foundation models;
• data;
• applications;
• advertising;
• enterprise software.

Similarly:

payment platform + marketplace

may create opportunities for vertical foreclosure.

Authorities therefore increasingly examine:

• vertical effects;
• conglomerate effects;
• data advantages;
• interoperability;
• foreclosure;
• ecosystem effects;
• access to infrastructure.

19. Possible Competition-Law Remedies

Where unlawful conduct is established, possible remedies include:

1. Unbundling

Allow customers to obtain one service without another.

2. Choice screens

Give consumers meaningful choices between competing services.

3. Anti-steering obligations

Allow businesses to inform customers about alternative purchasing mechanisms.

The CMA's current mobile-platform work illustrates the importance of steering: its proposed conduct requirements for Apple and Google would allow developers to communicate with customers and transact outside the platform on specified terms.

4. Interoperability

Require technical compatibility with rival services.

5. Data portability

Permit users to transfer relevant data to competing providers.

6. Non-discrimination

Require equivalent treatment of competing downstream services.

7. API access

Prevent unjustified exclusion of competing applications.

8. Structural remedies

In exceptional circumstances, separation of business units may be considered.

20. Economic Assessment

A proper competition analysis should measure:

Market power

• market share;
• entry barriers;
• network effects;
• switching costs;
• multi-homing;
• data advantages.

Competitive effects

• foreclosure;
• reduced innovation;
• reduced quality;
• higher effective prices;
• reduced choice;
• exclusion of rivals.

Efficiency effects

• technical integration;
• security;
• privacy;
• fraud prevention;
• reduced transaction costs;
• improved functionality;
• economies of scale.

The existence of integration alone should therefore not be treated as proof of anticompetitive conduct.

21. Chained Digital Services and the Indian Competition Act

Under Indian law, the principal provisions are:

Section 4(2)(d)

Particularly relevant where contracts make access to one service conditional upon acceptance of another obligation.

Section 4(2)(e)

Highly relevant to digital ecosystems because it addresses leveraging dominance in one relevant market to enter into, or protect, another relevant market.

Section 3

Can become relevant where multiple independent undertakings coordinate through:

• algorithms;
• common digital infrastructure;
• platform rules;
• data-sharing arrangements;
• interoperability restrictions.

Sections 5 and 6

Merger control becomes important where acquisitions consolidate several interconnected digital layers.

22. Distinguishing Legitimate Integration from Anticompetitive Chaining

The central competition-law question is therefore:

Does integration primarily improve the product, or does it exploit control over one market to restrict competition in another?

23. Key Doctrinal Principles from the Case Law

The six-plus authorities above collectively demonstrate several important propositions:

1. Tying remains relevant in technologically integrated products — Microsoft.
2. Pre-installation can create substantial competitive advantages — Google Android.
3. Control of an upstream digital gateway can be leveraged downstream — Google Shopping.
4. Self-preferencing can constitute a competition concern — Google Shopping.
5. App distribution and payment services can create interconnected competition issues — Epic Games v Apple.
6. Platform data and ranking systems can influence competition between the platform and its dependent businesses — Amazon Marketplace.
7. Information inherited from an existing position can contribute to exclusionary leveraging — Servizio Elettrico Nazionale.
8. Digital ecosystems should be analysed through their interconnected competitive effects rather than only as isolated products.

24. Conclusion

Chained digital services represent a major development in modern competition law because market power can be exercised through a sequence of interconnected services rather than through a single product.

The principal competition risks are:

• tying and bundling;
• leveraging;
• self-preferencing;
• foreclosure;
• discriminatory access;
• interoperability restrictions;
• ecosystem lock-in;
• data advantages;
• default bias;
• algorithmic discrimination;
• reduced multi-homing;
• exclusionary payment arrangements.

The modern approach is consequently moving from a simple “one market–one product” analysis toward an ecosystem and chain-based assessment.

The most important legal question is not whether a digital undertaking has integrated several services. Integration can generate substantial efficiencies. The critical issue is whether control of an upstream gateway is being used to distort competitive conditions in adjacent or downstream markets.

The Google Android, Google Shopping, Epic Games v Apple, Microsoft and Amazon cases provide particularly useful frameworks for analysing these issues, while the UK CMA's continuing mobile-platform investigations demonstrate how these questions are being addressed in contemporary digital-market regulation.