Competition Law and Foresight Infrastructure Market Power

1. Introduction

Foresight infrastructure market power refers to the use of competition-law tools to identify, assess, and control future or emerging concentrations of economic power in essential infrastructure markets before they produce durable foreclosure, exclusion, or monopolisation.

Infrastructure markets are particularly suitable for a foresight-based competition analysis because market power can develop gradually through:

• control of essential infrastructure;
• high fixed and sunk costs;
• network effects;
• economies of scale and scope;
• regulatory barriers to entry;
• long-term exclusive contracts;
• interoperability restrictions;
• vertical integration;
• control of data or technical standards;
• acquisition of emerging competitors; and
• strategic control over bottleneck facilities.

The central question is therefore not merely:

“Does the undertaking have market power today?”

but also:

“Could its control of infrastructure create or entrench market power tomorrow, and what competition risks should be addressed before they become irreversible?”

2. Meaning of Infrastructure Market Power

Infrastructure market power arises where an undertaking has substantial control over a facility, network, platform, system, or input that competitors need in order to compete.

Examples include:

• electricity transmission networks;
• gas pipelines;
• telecommunications networks;
• fibre networks;
• ports;
• airports;
• rail infrastructure;
• payment systems;
• cloud infrastructure;
• digital identity infrastructure;
• data centres;
• internet exchange points;
• charging networks;
• water and sewage networks;
• logistics infrastructure; and
• critical digital platforms.

Infrastructure is frequently characterised by bottleneck characteristics. A competitor may technically be able to enter the downstream market but still be unable to compete effectively without access to the infrastructure.

3. Why Foresight Is Important

Traditional competition law often examines an existing market structure.

A foresight approach additionally examines future competitive conditions.

Traditional approach

Existing structure → existing conduct → existing harm

Foresight approach

Infrastructure control → likely strategic conduct → future foreclosure → durable market power

This is especially relevant where infrastructure investments last for decades.

For example, a company controlling a major fibre network could potentially:

1. control access;
2. restrict competing internet-service providers;
3. impose discriminatory technical conditions;
4. bundle infrastructure with downstream services;
5. acquire competing infrastructure;
6. obtain data about downstream rivals; and
7. create switching costs.

The competition authority may therefore need to examine the trajectory of market power, not simply its present market share.

4. Legal Framework

The precise legal provisions differ by jurisdiction, but the principal competition-law doctrines include:

A. Abuse of dominance

A dominant infrastructure operator may abuse its position through:

• refusal to supply;
• discriminatory access;
• excessive or predatory pricing;
• tying;
• bundling;
• margin squeeze;
• exclusive dealing;
• loyalty rebates;
• discriminatory technical standards; or
• degradation of interoperability.

B. Essential-facilities principles

Where infrastructure is indispensable for competition, refusal of access may raise essential-facilities concerns.

However, competition law generally does not impose an automatic duty to share every facility.

Factors commonly considered include:

• indispensability;
• absence of realistic alternatives;
• elimination of effective competition;
• feasibility of access;
• objective justification; and
• proportionality of the requested remedy.

C. Merger control

Foresight is particularly important in infrastructure mergers.

Authorities may examine:

• loss of potential competition;
• vertical foreclosure;
• elimination of future entrants;
• network effects;
• access to essential inputs;
• control over data;
• increased switching costs; and
• coordinated effects.

D. Vertical foreclosure

An infrastructure provider may operate upstream while competing downstream.

This creates incentives to:

Raise rivals' costs → restrict access → favour its own downstream business.

E. Regulation and competition law

Infrastructure sectors frequently have sector-specific regulation.

Competition law may operate alongside:

• telecommunications regulation;
• energy regulation;
• transport regulation;
• access regulation;
• public-utility regulation; and
• digital-platform regulation.

5. Foresight Indicators of Emerging Infrastructure Power

A competition authority can monitor several indicators.

6. Case Laws

Case 1 — United Brands v Commission

European Court of Justice, Case 27/76 (1978)

Facts

United Brands held substantial market power in the banana market and imposed various contractual and commercial restrictions.

Principle

The Court explained that dominance concerns the ability of an undertaking to behave to an appreciable extent independently of competitors, customers, and consumers.

Relevance to infrastructure

The case provides a foundational understanding of economic power independent of competitors and customers.

In infrastructure markets, dominance may similarly arise where an operator controls a facility that downstream businesses cannot realistically avoid.

Foresight significance

A competition authority should examine whether infrastructure control is developing toward a position where the operator can increasingly act independently of market constraints.

7. Case 2 — Commercial Solvents v Commission

Joined Cases 6/73 and 7/73 (1974)

Facts

Commercial Solvents controlled an important upstream input and subsequently sought to restrict supplies to a downstream undertaking with which it competed.

Principle

The Court recognised that a dominant undertaking controlling an important upstream input could abuse its position by cutting off supplies to a downstream competitor.

Infrastructure significance

The case is highly relevant to infrastructure because it illustrates the danger of:

Upstream control + downstream competition = foreclosure incentive.

Foresight application

An infrastructure operator that enters downstream markets may have an incentive to restrict or disadvantage downstream competitors that depend upon its infrastructure.

This creates a need to examine vertical integration before foreclosure becomes entrenched.

8. Case 3 — Bronner v Mediaprint

Case C-7/97 (1998)

Facts

Oscar Bronner operated a newspaper but sought access to Mediaprint's newspaper-delivery system.

Principle

The Court established a demanding standard for imposing a duty to provide access to infrastructure.

The facility generally needed to be effectively indispensable, with no viable alternative, and refusal had to be capable of eliminating effective competition.

Infrastructure significance

Bronner is one of the principal European cases concerning access to infrastructure under Article 102 TFEU.

Foresight application

A foresight assessment should identify:

• whether alternatives are developing;
• whether duplication is commercially feasible;
• whether infrastructure investment could create a durable bottleneck;
• whether access conditions are likely to prevent future competition.

Thus, the relevant inquiry may include future availability of alternatives, not simply today's alternatives.

9. Case 4 — Oscar Bronner and the Indispensability Threshold

The broader importance of Bronner lies in its warning against treating every commercially important infrastructure as an essential facility.

A facility may be extremely useful without being legally indispensable.

Therefore, a competition authority should distinguish:

Useful infrastructure

Competitors would prefer access but can develop alternatives.

Indispensable infrastructure

Competitors realistically cannot compete without access.

Strategic bottleneck

The facility is likely to become indispensable because alternatives are becoming economically or technically unrealistic.

The third category is particularly important for foresight analysis.

10. Case 5 — IMS Health v NDC Health

Joined Cases C-241/00 P and C-242/00 P (2004)

Facts

IMS Health controlled a particular pharmaceutical data structure used by competitors.

Principle

The European Court addressed circumstances in which refusal to license an intellectual-property-related infrastructure could constitute an abuse.

The case reinforced the exceptional nature of compulsory access.

Infrastructure relevance

Modern infrastructure increasingly includes digital infrastructure and data architecture.

Examples include:

• proprietary APIs;
• interoperability frameworks;
• technical standards;
• data exchanges;
• cloud infrastructure;
• digital identity systems.

Foresight significance

Competition authorities may need to determine whether technical architecture is becoming a digital bottleneck capable of controlling downstream competition.

11. Case 6 — Magill

Joined Cases C-241/91 P and C-242/91 P (1995)

Facts

Television broadcasters controlled copyright-protected programme information and refused to allow publication of comprehensive programme listings.

Principle

The Court recognised exceptional circumstances in which refusal to license intellectual property could amount to abuse.

Infrastructure connection

Although Magill concerned information rather than physical infrastructure, its logic is relevant to modern digital infrastructure.

Where a firm controls an indispensable information layer, competitors may become dependent upon it.

Foresight issue

Authorities may therefore monitor whether control over:

• proprietary databases;
• technical information;
• APIs;
• interoperability data; or
• infrastructure information

is becoming capable of excluding downstream competitors.

12. Case 7 — Telefónica v Commission

Case C-295/12 P (2014)

Facts

The case concerned broadband infrastructure and pricing conduct by Telefónica in Spain.

Principle

The European Union courts considered the application of Article 102 to conduct capable of restricting competition in telecommunications markets.

Infrastructure significance

Telecommunications networks demonstrate particularly clearly how infrastructure ownership can create market power because:

• network construction is expensive;
• deployment requires substantial capital;
• duplication may be difficult;
• customers can face switching costs; and
• access to networks can determine downstream competitiveness.

Foresight application

Authorities can therefore examine whether pricing or access practices may prevent competitors from building sufficient scale before the market becomes irreversibly concentrated.

13. Case 8 — Slovak Telekom v Commission

Joined Cases C-152/19 P and C-165/19 P (2021)

Facts

Slovak Telekom, an incumbent telecommunications operator, was found to have engaged in conduct concerning access to its network that affected competing operators.

Principle

The case addressed exclusionary conduct involving access to infrastructure and the relationship between general abuse-of-dominance principles and sector-specific access obligations.

Infrastructure significance

The case demonstrates that competition concerns may arise where an incumbent controls infrastructure and competing firms require access to it.

Foresight relevance

The case supports examining:

• technical access;
• pricing;
• contractual conditions;
• network architecture;
• downstream competitive effects; and
• the interaction between regulation and competition law.

14. Case 9 — Aéroports de Paris v Commission

Case C-82/01 P (2002)

Facts

Aéroports de Paris was involved in the management and operation of airport infrastructure and related services.

Principle

The Court examined the application of EU competition rules to activities associated with airport infrastructure.

Infrastructure significance

Airport infrastructure illustrates the relationship between:

physical bottleneck + access conditions + downstream service markets.

Foresight application

Similar analysis can apply to:

• ports;
• railway terminals;
• airport slots;
• logistics hubs;
• charging infrastructure; and
• energy terminals.

Control of the infrastructure can affect competition in numerous downstream markets.

15. Case 10 — Sea Containers v Stena Sealink

European Commission, 1994

Facts

The case concerned access to the Holyhead port, where the infrastructure operator also had interests in competing ferry services.

Principle

The European Commission addressed concerns arising where an infrastructure operator could use control of a facility to disadvantage competitors.

Infrastructure significance

It is a classic example of the vertically integrated infrastructure bottleneck problem.

Foresight application

The central risk can be expressed as:

Infrastructure control

↓

Downstream participation

↓

Incentive to discriminate

↓

Competitor foreclosure

↓

Durable market power

This structure is highly relevant to modern ports, energy networks, digital infrastructure, and telecommunications.

16. Foresight and Essential Facilities

The essential-facilities doctrine should not be treated as a general requirement that infrastructure owners share their assets.

A structured analysis should ask:

Step 1 — Is the facility genuinely indispensable?

Can competitors realistically duplicate or substitute it?

Step 2 — Are alternatives emerging?

Could:

• new infrastructure;
• technological innovation;
• interoperability;
• alternative networks; or
• decentralized systems

reduce dependence?

Step 3 — Does refusal eliminate effective competition?

The effect must be distinguished from mere commercial disadvantage.

Step 4 — Is there objective justification?

Possible considerations include:

• capacity constraints;
• safety;
• investment incentives;
• technical limitations;
• security;
• legitimate commercial reasons.

Step 5 — What remedy preserves competition?

Possible solutions include:

• access obligations;
• non-discrimination;
• transparent pricing;
• interoperability;
• functional separation;
• information firewalls; and
• monitoring.

17. Infrastructure Market Power and Network Effects

Network effects can make infrastructure power self-reinforcing.

For example:

More users

↓

Greater network value

↓

More investment

↓

More users

↓

Higher switching costs

↓

More difficult entry

This creates a feedback loop.

Competition authorities should therefore consider whether current market share understates future market power.

18. Infrastructure Lock-In

Long-term contracts can produce infrastructure lock-in.

For example:

A dominant infrastructure provider signs ten-year contracts with major customers.

The result may be:

• reduced contestable demand;
• insufficient scale for entrants;
• increased switching costs;
• exclusion of rival infrastructure;
• reduced investment incentives.

The contractual arrangement may therefore need to be assessed not only according to its current effects but also according to its duration and cumulative foreclosure effect.

19. Foresight in Merger Control

Infrastructure mergers require particular attention to future competitive conditions.

A merger can eliminate:

1. Existing competition

Two current infrastructure competitors become one.

2. Potential competition

A firm capable of becoming a future competitor disappears.

3. Innovation competition

A competing infrastructure technology may never reach commercial scale.

4. Independent access

The merged entity may control multiple infrastructure layers.

5. Alternative routes

The merger can eliminate geographic or technological alternatives.

20. Vertical Infrastructure Foreclosure

Consider:

Infrastructure operator A

owns

essential network

and also owns

downstream service provider A

while

Competitor B

needs the network.

A may have an economic incentive to:

• raise B's access costs;
• delay technical integration;
• degrade interoperability;
• provide inferior service;
• restrict capacity;
• obtain sensitive information concerning B; or
• favour its own downstream service.

Competition law therefore needs to examine both:

ability to foreclose

and

incentive to foreclose.

21. Foresight and Digital Infrastructure

Modern infrastructure increasingly has a digital component.

Examples include:

• cloud computing;
• app stores;
• payment infrastructure;
• digital identity;
• operating systems;
• data exchanges;
• APIs;
• internet backbone networks;
• data centres;
• AI computing infrastructure.

The distinction between physical infrastructure and digital infrastructure is consequently becoming less clear.

A data centre, cloud platform, API or digital identity system can perform a bottleneck function comparable to a physical network.

22. Foresight and AI Infrastructure

AI introduces another infrastructure layer:

Compute → Cloud → Data → Models → Applications

Control over one layer may create leverage over another.

For example, a firm controlling scarce computing infrastructure might also operate downstream AI applications.

Competition authorities could therefore examine:

• compute access;
• cloud interoperability;
• model portability;
• data access;
• technical standards;
• switching costs;
• exclusive supply agreements; and
• acquisitions of emerging AI competitors.

23. Energy Infrastructure

Energy markets are particularly suitable for foresight analysis because infrastructure can have long economic lives.

Examples include:

• transmission grids;
• LNG terminals;
• pipelines;
• hydrogen networks;
• electricity interconnectors;
• battery-storage systems;
• EV charging networks.

Potential competition issues include:

• discriminatory grid access;
• capacity reservation;
• refusal to connect;
• preferential treatment;
• vertical integration;
• long-term exclusivity; and
• control over strategically located infrastructure.

24. Transport Infrastructure

Similar concerns arise with:

• airports;
• ports;
• rail networks;
• toll roads;
• freight terminals;
• logistics platforms.

A single infrastructure facility may serve numerous downstream markets.

Therefore:

One infrastructure bottleneck can generate several downstream competition problems.

25. Competition-Foresight Framework

A useful analytical model is:

Stage 1 — Identify infrastructure

What physical, digital or technological infrastructure is involved?

Stage 2 — Identify bottlenecks

Which infrastructure cannot easily be duplicated?

Stage 3 — Identify dependency

Which competitors or customers depend upon it?

Stage 4 — Measure concentration

Assess:

• market shares;
• capacity;
• geographic coverage;
• customer dependence;
• switching costs.

Stage 5 — Examine future development

Consider:

• planned infrastructure;
• technological change;
• investment;
• regulatory changes;
• new entrants.

Stage 6 — Test foreclosure incentives

Could the infrastructure owner benefit from excluding competitors?

Stage 7 — Assess durability

Could the resulting market power persist for:

• five years;
• ten years;
• twenty years?

Stage 8 — Consider remedies

Potential remedies should preserve:

• access;
• interoperability;
• contestability;
• investment incentives;
• innovation.

26. Foresight Risk Matrix