Competition Law and Extended Reality Platform Gatekeepers

1. Introduction

Extended Reality (XR) encompasses virtual reality (VR), augmented reality (AR), mixed reality (MR), smart glasses, immersive operating systems, spatial-computing platforms, XR app stores, digital avatars, virtual goods, and associated developer ecosystems.

An XR platform gatekeeper is a firm that controls an important access point between XR users and businesses or developers. A gatekeeper may control:

• the XR operating system;
• headset or smart-glasses hardware;
• the XR app store;
• developer APIs and software-development kits;
• identity and payment systems;
• distribution and discovery;
• advertising and data access;
• interoperability with competing devices;
• virtual goods and in-app payments; and
• access to complementary XR applications.

Competition law becomes particularly important because an XR firm can potentially operate simultaneously as platform operator, hardware manufacturer, app-store operator and competitor to developers using the platform.

The most directly relevant modern enforcement example is the FTC's case concerning Meta's proposed acquisition of Within Unlimited, a VR fitness-app developer. The FTC alleged that Meta already controlled important elements of the VR ecosystem—including a major VR headset, app store and popular VR applications—and that acquiring Within could reduce competition in VR fitness applications.

2. Meaning of an XR Platform Gatekeeper

A gatekeeper generally possesses an intermediary position that competitors or business users cannot easily bypass.

In an XR ecosystem, the structure may look like:

XR Hardware → XR Operating System → App Store → Developer → User

or:

Smart Glasses → Operating Layer → AI/AR Services → Content → User

A company may therefore have several layers of market power simultaneously.

Examples of potentially relevant gatekeeping functions

1. Operating-system control
2. App-store control
3. Payment-system control
4. API access
5. Hardware certification
6. Developer access
7. User identity
8. Data access
9. Advertising infrastructure
10. Interoperability standards

The competition concern is not simply that the company is large. The critical question is whether it can use control over one layer to distort competition at another layer.

3. Relevant Competition-Law Theories

A. Abuse of Dominance

A dominant XR platform may potentially abuse its position through:

• exclusionary conduct;
• discriminatory access;
• refusal to interoperate;
• tying;
• bundling;
• self-preferencing;
• exclusive dealing;
• loyalty rebates;
• predatory pricing;
• excessive or discriminatory fees; and
• discriminatory technical restrictions.

Under EU law, Article 102 TFEU is particularly relevant.

In India, analogous concerns arise principally under Sections 4 and 19 of the Competition Act, 2002.

4. Tying and Bundling

An XR gatekeeper could make access to one product conditional upon using another.

Examples

A headset operator might require:

XR developers must use the platform's proprietary payment system.

Or:

XR applications must use the platform's identity service to obtain access to particular APIs.

Or:

Smart-glasses manufacturers must distribute the platform owner's AI assistant as the default service.

The competition analysis would examine:

• whether the products are distinct;
• whether the firm possesses market power in the tying product;
• whether customers are effectively forced to accept the tied product;
• foreclosure of competitors;
• technical necessity;
• efficiencies; and
• consumer benefits.

5. Self-Preferencing

An XR gatekeeper may operate an app marketplace while simultaneously competing with developers.

For example:

Platform's fitness application

versus

Independent XR fitness applications

Potential concerns arise if the platform:

• places its own application first;
• gives its applications privileged API access;
• provides better technical functionality to its own apps;
• manipulates search results;
• imposes additional requirements on rivals; or
• uses competitor data to improve its competing application.

The problem becomes particularly significant where the platform controls both discovery and competition.

6. Refusal of Interoperability

Interoperability is especially important in XR.

An XR platform could theoretically prevent rival services from accessing:

• motion sensors;
• spatial-mapping information;
• hand-tracking functions;
• eye-tracking interfaces;
• avatar systems;
• identity systems;
• payment functionality;
• notification systems;
• device-location functions; or
• augmented-reality APIs.

The legal question is whether the refusal is a legitimate technical or security measure or constitutes exclusionary conduct.

The recent Alphabet/Android Auto judgment is highly relevant by analogy. The CJEU held that the traditional Bronner essential-facilities criteria do not automatically govern every refusal to provide interoperability where a digital platform is designed to accommodate third-party complementors.

7. Essential-Facilities Issues

Traditional cases such as:

• Bronner;
• Magill;
• IMS Health; and
• Microsoft

developed important principles concerning access to indispensable facilities.

In XR, potentially essential infrastructure could include:

• proprietary XR operating systems;
• critical APIs;
• spatial-computing interfaces;
• authentication systems;
• app distribution infrastructure.

However, not every commercially important API constitutes an essential facility.

Courts and regulators would normally need to consider:

1. indispensability;
2. availability of alternatives;
3. foreclosure effects;
4. objective justification;
5. technical feasibility;
6. innovation incentives; and
7. effects on consumers.

8. Six Major Case Laws

1. FTC v. Meta Platforms, Inc. / Within Unlimited

Jurisdiction: United States
Authority: Federal Trade Commission
Subject: VR fitness applications and platform acquisition

This is the most directly XR-specific competition case.

The FTC challenged Meta's proposed acquisition of Within Unlimited, developer of the VR fitness application Supernatural. The FTC alleged that Meta was already an important VR ecosystem participant because it operated VR hardware, an app store and competing applications. The agency argued that acquiring Within could eliminate competition and innovation in VR fitness applications.

Competition-law significance

The case demonstrates the possibility of vertical and ecosystem competition concerns in XR.

The important issue is not simply the size of an acquisition target. It is whether the platform owner is purchasing a company that could become an important competitor or complementary application.

Principle for XR

An XR gatekeeper's acquisitions of developers can raise concerns where the platform controls:

hardware + operating system + distribution + applications.

2. United States v. Microsoft Corp.

Jurisdiction: United States
Court: U.S. Court of Appeals for the D.C. Circuit
Subject: Platform dominance, tying and exclusionary conduct

Microsoft is one of the foundational platform-competition cases.

The litigation concerned Microsoft's Windows operating-system dominance and its conduct toward competing technologies, particularly web browsers. The appellate court treated technological tying involving platform software differently from traditional per se tying and applied a rule-of-reason analysis.

Relevance to XR

An XR operating system can perform a role analogous to a computer operating system.

The case therefore provides a framework for considering:

• technological tying;
• platform leverage;
• exclusionary contracts;
• interoperability;
• distribution restrictions; and
• protection of platform dominance.

The lesson for XR is that integration of functionality is not automatically unlawful. Competition authorities must distinguish legitimate product improvement from conduct that improperly protects monopoly power.

3. Microsoft Corp. — European Commission

Case: Microsoft
Jurisdiction: European Union
Subject: Interoperability and abuse of dominance

The European Microsoft litigation is particularly important for interoperability.

The case concerned Microsoft's refusal to provide sufficient interoperability information for competing work-group server products and other conduct involving its dominant operating-system position.

XR relevance

Imagine an XR platform that prevents rival developers from obtaining information necessary to communicate effectively with its operating environment.

The Microsoft framework provides an important analogy for asking:

• Is access technically necessary?
• Does refusal eliminate effective competition?
• Is the platform using proprietary infrastructure to protect a downstream market?
• Is there an objective justification?

XR platforms may therefore face significant competition scrutiny where closed architecture becomes a mechanism for excluding competing applications.

4. Google Android

Case: Google Android
Jurisdiction: European Union
Subject: Mobile operating systems, app stores, tying and restrictions

The Google Android litigation concerned Google's conduct involving Android and associated services.

The case is highly relevant because an XR ecosystem may replicate the structure of a mobile ecosystem:

Operating System → App Store → Search/Discovery → Payments → Applications

XR relevance

Potentially problematic conduct could include:

• tying the XR app store to other services;
• requiring particular defaults;
• restricting competing app stores;
• limiting installation channels;
• restricting developers' ability to communicate alternative offers; and
• imposing discriminatory technical conditions.

The Android experience demonstrates why competition authorities increasingly analyse ecosystems rather than individual products in isolation.

9. Google Shopping

Case: Google Search (Shopping)
Jurisdiction: European Union
Subject: Self-preferencing

Google was found to have abused its dominant position by favouring its own comparison-shopping service in general search results.

XR relevance

An XR platform could similarly control:

Search → Ranking → Recommendation → Consumer choice

Suppose an XR app store ranks the platform's own applications above competing applications regardless of relevant quality or user preferences.

The central competition issue would become whether the platform's control over discovery infrastructure is being used to disadvantage rivals.

Thus, XR competition law extends beyond app-store access to algorithmic visibility.

10. Intel v Commission

Case: Intel
Jurisdiction: European Union
Subject: Loyalty rebates and exclusionary effects

Intel is an important Article 102 TFEU authority concerning exclusivity/loyalty rebates and the analysis of whether conduct is capable of producing foreclosure effects. The CJEU's later judgment addressed the requirement for analysing the competitive effects of exclusivity rebates and the as-efficient-competitor framework.

XR relevance

An XR platform might offer:

• preferential commission rates;
• advertising credits;
• developer subsidies;
• reduced app-store fees;
• hardware discounts; or
• technical benefits

conditional upon developers distributing exclusively through the platform.

Competition authorities would need to distinguish ordinary competitive incentives from arrangements capable of foreclosing rival XR ecosystems.

11. Bronner

Case: Oscar Bronner GmbH & Co. KG v Mediaprint
Court: Court of Justice of the European Union
Subject: Refusal of access / essential facilities

Bronner established a restrictive framework for certain refusal-to-deal claims.

The traditional considerations include:

• indispensability;
• elimination of effective competition;
• inability to duplicate the facility; and
• absence of objective justification.

XR relevance

Suppose a developer argues that access to a proprietary XR interface is indispensable.

The developer cannot simply say:

"The API is commercially important."

It may need to establish that the facility is genuinely indispensable and that refusal produces the type of competitive harm recognised by the applicable legal framework.

However, the later Android Auto judgment demonstrates that digital-platform interoperability cases may require a more nuanced approach than mechanically applying Bronner.

12. Meta and the Modern Gatekeeper Framework

The EU Digital Markets Act is particularly relevant to XR because it supplements traditional ex-post competition law with ex-ante obligations for designated gatekeepers.

The European Commission initially designated six gatekeepers—Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft—in 2023.

Meta's designated core platform services include Facebook, Instagram, WhatsApp, Messenger and Meta Ads.

Importantly, designation depends on the legally defined core-platform-service categories and statutory criteria; an XR product is not automatically a DMA gatekeeper merely because it is technologically important.

The 2026 Meta Platforms v Commission judgment also illustrates the continuing importance of the concepts of:

• core platform service;
• important gateway;
• gatekeeper designation;
• quantitative presumptions;
• rebuttal of presumptions; and
• market investigation. 

13. Potential XR Gatekeeper Conduct

14. Network Effects in XR

XR markets can exhibit powerful direct and indirect network effects.

Direct network effects

More users can make an XR ecosystem more valuable.

Indirect network effects

More users attract:

Developers → Applications → Content → More users.

This can produce a feedback loop:

Users ↑ → Developers ↑ → Applications ↑ → Platform attractiveness ↑ → Users ↑

A successful gatekeeper can therefore become difficult to challenge even without continuously increasing prices.

This makes traditional price-based market analysis less sufficient.

15. Data as a Source of Market Power

XR platforms can potentially collect unusually rich information, including:

• movement;
• gaze;
• gestures;
• voice;
• spatial surroundings;
• biometric signals;
• device interactions;
• user preferences;
• virtual-world behaviour; and
• interaction with advertisements.

Competition law may become relevant where such data creates an advantage that competitors cannot realistically replicate.

However, privacy law and competition law remain distinct legal regimes. A privacy violation does not automatically establish an antitrust violation.

The competition inquiry focuses on effects on:

• market power;
• competitive access;
• innovation;
• entry;
• consumer choice; and
• rival foreclosure.

16. Market Definition in XR

Market definition can be difficult because XR markets overlap.

Possible relevant markets include:

Hardware

• VR headsets;
• AR glasses;
• mixed-reality devices.

Software

• XR operating systems;
• spatial-computing platforms.

Distribution

• XR app stores.

Applications

• XR gaming;
• XR fitness;
• education;
• enterprise applications;
• healthcare applications.

Infrastructure

• spatial mapping;
• developer tools;
• identity;
• payments;
• cloud rendering.

Complementary services

• advertising;
• virtual goods;
• avatar platforms.

The relevant market cannot simply be assumed to be "the metaverse." Competition analysis normally requires evidence concerning substitutability, demand, supply, geography and competitive constraints.

17. Barriers to Entry

XR gatekeepers may benefit from several barriers:

1. High hardware-development costs.
2. Proprietary operating systems.
3. Developer-network effects.
4. User switching costs.
5. Established app ecosystems.
6. Data advantages.
7. Brand recognition.
8. Distribution advantages.
9. Patent portfolios.
10. Developer SDK dependence.
11. Content exclusivity.
12. Economies of scale.

The greater the combination of these factors, the greater the potential concern that an incumbent can protect its position through ecosystem control.

18. Merger-Control Dimension

XR competition is also affected by acquisitions.

A dominant platform could acquire:

• a promising XR gaming company;
• a spatial-computing startup;
• a gesture-recognition company;
• a competing app store;
• an AI assistant;
• a virtual-world platform; or
• a VR fitness application.

The Meta/Within proceeding illustrates precisely why acquisitions in emerging XR markets may receive antitrust scrutiny.

Competition authorities may examine:

• loss of potential competition;
• elimination of future competitors;
• innovation effects;
• data accumulation;
• ecosystem expansion;
• vertical foreclosure; and
• increased control over complementary applications.

19. Remedies

Possible competition-law remedies include:

Structural remedies

• divestiture;
• separation of business units.

Behavioural remedies

• non-discriminatory access;
• interoperability;
• API access;
• transparent ranking;
• restrictions on self-preferencing;
• data-access obligations.

Consumer-choice remedies

• alternative app stores;
• alternative payment systems;
• default-choice screens;
• sideloading.

Merger remedies

• divestiture of competing applications;
• licensing;
• interoperability commitments;
• restrictions on use of competitively sensitive data.

The appropriate remedy depends on the proven competitive harm and the applicable jurisdiction.

20. Indian Competition-Law Perspective

Under the Competition Act, 2002, the principal provisions potentially relevant to XR gatekeepers include:

Section 3

Anti-competitive agreements.

Section 4

Abuse of dominant position.

Section 5

Combinations.

Section 19

CCI's power to inquire into agreements and abuse of dominance.

For an XR platform, Section 4 could potentially become relevant to:

• discriminatory conditions;
• denial of market access;
• tying;
• leveraging;
• exclusionary conduct;
• unfair conditions; and
• other forms of abuse.

A major analytical issue would be defining the relevant market—whether it is:

XR hardware,

XR operating systems,

XR app distribution,

particular XR applications,

or a broader ecosystem.

21. Key Legal Principles Emerging from the Case Law

The combined lessons of the above cases can be expressed as follows:

Principle 1 — Platform size alone is insufficient

A large XR platform is not automatically abusing dominance.

Principle 2 — Ecosystem control matters

Competition authorities may examine interconnected layers rather than one isolated product.

Principle 3 — Vertical integration is not automatically unlawful

Operating hardware, software and applications under one corporate structure can generate efficiencies.

Principle 4 — Integration can become problematic when exclusionary

The Microsoft cases demonstrate the importance of distinguishing innovation from exclusion.

Principle 5 — Interoperability can be competitively significant

The Android Auto litigation demonstrates the increasing importance of access and interoperability in digital ecosystems.

Principle 6 — Acquisitions may eliminate potential competition

The Meta/Within litigation demonstrates the relevance of this issue specifically to VR.

Principle 7 — Discovery can itself be a competitive bottleneck

Google Shopping illustrates how control over ranking and visibility can affect downstream competition.

Principle 8 — Exclusionary incentives require effects analysis

Intel illustrates the importance of examining whether particular commercial arrangements can produce foreclosure rather than assuming that every incentive or rebate is unlawful.

22. Conclusion

Extended Reality platform gatekeepers represent a convergence of traditional platform, technology and competition-law problems.

The most significant competition concerns arise where one undertaking controls several layers simultaneously:

Hardware → Operating System → APIs → App Store → Payments → Data → Applications → Users

The Meta/Within litigation provides the clearest XR-specific example of merger concerns, while Microsoft, Google Android, Google Shopping, Intel, Bronner and Android Auto provide important legal frameworks for analysing tying, interoperability, self-preferencing, exclusionary incentives and refusal of access.

The central competition-law question is therefore not simply whether an XR platform is technologically dominant. It is whether its control over the XR ecosystem is being used in a manner that forecloses rivals, restricts access, reduces consumer choice, suppresses innovation or otherwise harms the competitive process, while taking legitimate technological efficiencies and innovation into account.