Competition Law and Future Digital Sovereignty and Competition Policy

1. Introduction

Digital sovereignty refers to a state’s or regional bloc’s capacity to maintain meaningful control over critical digital infrastructure, data, technologies, standards, platforms, artificial intelligence systems and digital supply chains without becoming excessively dependent on a small number of foreign or private technology providers.

Competition law traditionally asks whether market power is being used to exclude rivals, exploit customers, restrict innovation or distort competitive conditions. Digital sovereignty adds another structural dimension:

Who controls the infrastructure on which digital competition takes place?

This question is increasingly important for cloud computing, AI, operating systems, app stores, semiconductors, digital identity, cybersecurity, data infrastructure, search engines and digital payment systems.

The future relationship between competition law and digital sovereignty is therefore likely to involve two simultaneous objectives:

1. preserving open and contestable markets; and
2. reducing harmful dependencies on indispensable digital infrastructure.

The challenge is to ensure that sovereignty policies do not themselves become protectionist barriers against foreign competitors.

2. Meaning of Digital Sovereignty

Digital sovereignty can be divided into several dimensions.

A. Data sovereignty

This concerns control over:

• personal data;
• industrial data;
• government data;
• health data;
• financial data;
• AI training datasets; and
• strategically important business information.

Competition concerns arise when a dominant platform controls data that competitors cannot realistically reproduce.

B. Infrastructure sovereignty

This concerns dependence upon:

• cloud providers;
• telecommunications networks;
• data centres;
• semiconductor supply chains;
• operating systems;
• app stores;
• digital payment infrastructure; and
• AI computing infrastructure.

If a small number of companies control these infrastructures, downstream businesses may become dependent upon them.

C. Technological sovereignty

This concerns the ability to develop or obtain:

• AI technologies;
• cybersecurity technologies;
• cloud infrastructure;
• chips;
• encryption;
• operating systems;
• digital standards; and
• critical software.

D. Regulatory sovereignty

States increasingly seek the capacity to regulate technology companies even where those companies are headquartered elsewhere.

This creates potential conflicts between:

• competition law;
• data protection;
• national security;
• industrial policy;
• foreign investment regulation; and
• digital-market regulation.

3. Why Digital Sovereignty Is Becoming a Competition-Law Issue

Traditional competition law generally focuses on markets.

Digital sovereignty focuses partly on dependencies.

A country may have several nominal competitors in a market but still face sovereignty concerns if all of them depend upon:

• one cloud infrastructure;
• one operating system;
• one app store;
• one payment network;
• one semiconductor architecture; or
• one AI foundation model.

Therefore, future competition policy may increasingly ask:

Traditional question

Is the undertaking dominant?

Emerging question

Can competitors realistically survive without access to the infrastructure controlled by the undertaking?

Further question

Would the loss of that infrastructure create strategic dependence for the economy or public sector?

This does not mean that strategic importance automatically establishes an antitrust violation. Competition law still requires legally relevant evidence of market power, exclusionary conduct, harm or other applicable elements.

4. Major Competition-Law Principles Relevant to Digital Sovereignty

4.1 Abuse of dominance

A dominant technology company may potentially abuse its position through:

• exclusionary contracts;
• tying;
• bundling;
• self-preferencing;
• discriminatory access;
• refusal to supply;
• excessive switching costs;
• interoperability restrictions;
• exclusive arrangements; or
• discriminatory use of data.

4.2 Essential facilities and infrastructure access

Digital sovereignty makes the essential-facilities concept particularly important.

Potentially critical infrastructure may include:

• cloud platforms;
• app stores;
• payment systems;
• operating systems;
• network infrastructure;
• data exchanges;
• digital identity systems; and
• interoperability interfaces.

However, competition law traditionally applies a demanding test before requiring a dominant company to provide access to infrastructure.

5. Six Major Case Laws

The following cases provide important foundations for analysing future digital-sovereignty problems.

Case 1 — United States v. Microsoft Corp. (2001)

Facts

Microsoft was accused of using its dominance in PC operating systems to restrict competition from rival web browsers, particularly Netscape.

Microsoft used contractual and technological strategies that were found to disadvantage competing browser distribution.

Legal significance

The case demonstrated that dominance over a technological platform can create power in adjacent markets.

The operating system functioned as a gateway through which competing software had to reach consumers.

Digital-sovereignty relevance

The case provides an important analogy for future markets involving:

• AI operating systems;
• cloud platforms;
• smart-device ecosystems;
• digital identity;
• autonomous systems; and
• foundation-model platforms.

If a company controls a foundational technological layer, it may possess the ability to influence competition in downstream markets.

Future principle

Control over infrastructure can become control over adjacent innovation markets.

6. Case 2 — Google Shopping / Google Search (European Commission and General Court)

Facts

Google was found by the European Commission to have favoured its own comparison-shopping service in search results while disadvantaging competing comparison-shopping services.

The EU courts subsequently upheld the essential finding of abuse.

Competition principle

The case is important for the concept of:

self-preferencing by a vertically integrated digital platform.

A platform that controls an important gateway can potentially manipulate access or visibility in favour of its own downstream service.

Digital-sovereignty relevance

The same problem can arise where a technology provider controls:

• AI search;
• cloud marketplaces;
• app distribution;
• digital advertising;
• digital payments;
• online government services; or
• AI-agent marketplaces.

If the platform determines which competing services are visible or accessible, its infrastructure position may affect the technological autonomy of an entire ecosystem.

7. Case 3 — Google Android

Case

Google and Alphabet v European Commission, Case C-738/22 P, judgment of 2 July 2026.

The litigation concerned Google's conduct concerning Android, including contractual restrictions, tying, exclusive pre-installation arrangements and restrictions affecting Android forks.

The Court of Justice addressed the relationship between Google's different markets and the exclusionary effects of its conduct.

Competition principle

The case demonstrates how dominance in one digital layer can be leveraged into neighbouring markets.

Relevant layers include:

Operating system → search → app distribution → mobile services → advertising

Digital-sovereignty relevance

Operating systems are strategically significant because they determine:

• interoperability;
• application access;
• default services;
• user switching;
• developer access; and
• technical compatibility.

Future competition policy may therefore examine whether a dominant operating-system provider can use control over the technical architecture to suppress competing technologies.

8. Case 4 — IMS Health v NDC Health

Case

IMS Health GmbH & Co. OHG v NDC Health GmbH & Co. KG

The case concerned access to a commercially important data structure used in the pharmaceutical sector.

The Court of Justice developed important principles concerning when refusal by a dominant undertaking to license or provide access to an indispensable resource can constitute abuse.

Competition principle

The case is central to the development of the European refusal-to-deal doctrine.

The existence of an important intellectual property right or infrastructure resource does not automatically mean that competitors are entitled to access it.

The circumstances must satisfy demanding conditions.

Digital-sovereignty relevance

The principle becomes highly significant for:

• proprietary datasets;
• AI training data;
• digital identity infrastructure;
• interoperability interfaces;
• cloud APIs;
• technical standards; and
• critical databases.

Future question

If a company controls a dataset that cannot reasonably be replicated, competition authorities may increasingly have to consider whether access restrictions prevent effective competition.

9. Case 5 — Bronner v Mediaprint

Case

Oscar Bronner GmbH & Co. KG v Mediaprint Zeitungs- und Zeitschriftenverlag GmbH & Co. KG

The dispute involved access to a newspaper distribution system.

Competition principle

The Court of Justice adopted a restrictive approach to compulsory access.

A facility generally cannot be treated as an essential facility merely because access would make competition easier or more convenient.

The resource must be genuinely indispensable under the applicable legal test.

Digital-sovereignty significance

Bronner remains important for determining whether a digital infrastructure should be opened to competitors.

Potential examples include:

• cloud infrastructure;
• AI computing capacity;
• payment networks;
• app stores;
• digital identity infrastructure;
• telecommunications systems; and
• data exchanges.

Important limitation

Digital sovereignty should not automatically produce a legal rule that every strategically important technology must be shared.

Otherwise, competition law could undermine investment incentives.

10. Case 6 — Slovak Telekom v European Commission

Case

Slovak Telekom and Deutsche Telekom v European Commission

The case concerned access to telecommunications infrastructure and the conditions under which a dominant undertaking can be held responsible for exclusionary conduct involving access.

Competition principle

The case illustrates the interaction between:

• infrastructure dominance;
• access conditions;
• pricing;
• foreclosure; and
• downstream competition.

Digital-sovereignty significance

Telecommunications infrastructure is foundational to the digital economy.

The same analytical logic can increasingly arise with:

• fibre networks;
• 5G infrastructure;
• cloud infrastructure;
• data centres;
• edge computing;
• satellite communications; and
• AI computing infrastructure.

Future principle

Competition policy may increasingly focus on control of foundational infrastructure rather than only consumer-facing applications.

11. Case 7 — Qualcomm

Case

The European Commission's Qualcomm investigations and litigation concerning chipset markets illustrate competition problems associated with technologically important components and exclusionary arrangements.

Qualcomm's position in mobile communications technology demonstrated how control over an important technological input can influence downstream device markets.

Digital-sovereignty relevance

The same issue is particularly important for:

• semiconductors;
• GPUs;
• AI accelerators;
• telecommunications chips;
• cloud infrastructure;
• autonomous-vehicle processors; and
• specialised AI hardware.

A technologically important upstream input can become a strategic bottleneck.

12. Case 8 — Bundeskartellamt v Meta Platforms

Facts

The German competition authority investigated Meta's combination of data from different services in the context of its dominant social-networking position.

The proceedings became an important example of the relationship between:

• data accumulation;
• market power;
• privacy;
• consumer choice; and
• competition.

Digital-sovereignty significance

The case illustrates that data governance and competition cannot always be treated as completely separate regulatory fields.

Large-scale data aggregation can reinforce:

more data → better service → more users → more data

This creates a feedback loop that can make digital markets difficult for new entrants to penetrate.

13. Digital Sovereignty and Data as a Competitive Resource

Data may become one of the most important competition-policy resources of the future.

A dominant platform may possess:

• behavioural data;
• search data;
• transaction data;
• location data;
• industrial data;
• advertising data;
• consumer preference data; and
• AI-generated interaction data.

The competition problem arises when data accumulation produces irreproducible advantages.

Future competition policy may therefore consider:

Data access

Whether competitors should receive controlled access to particular datasets.

Data portability

Whether users and businesses can transfer their data easily.

Data interoperability

Whether different systems can communicate effectively.

Data separation

Whether data collected in one market can be combined with data from another market.

Data-use restrictions

Whether a dominant firm can use data obtained from business customers to compete against those same customers.

14. Cloud Sovereignty

Cloud computing may become one of the most important digital-sovereignty competition issues.

The concern is not merely market share.

It involves:

• switching costs;
• proprietary APIs;
• data-transfer charges;
• interoperability;
• software dependencies;
• contractual restrictions;
• cloud credits;
• AI integration;
• cybersecurity;
• data location; and
• migration costs.

As of June 2026, the European Commission had preliminarily taken the view that Amazon Web Services and Microsoft Azure could qualify for DMA gatekeeper designation despite not meeting the ordinary quantitative thresholds, because of their gateway role, entrenched positions and switching-cost effects. This illustrates how cloud infrastructure is moving closer to the centre of digital competition policy.

The Commission's DMA review has also identified cloud and AI as critical priorities for future digital competition.

15. AI and Digital Sovereignty

Artificial intelligence creates a new form of digital dependence.

The competitive chain can be represented as:

Semiconductors → Compute → Cloud → Foundation Model → AI Applications → Distribution Platform

Control at any layer can potentially create competitive advantages at another layer.

For example:

• a cloud provider may host competing AI companies;
• a foundation-model provider may control critical APIs;
• an operating system may determine which AI assistants can access device functions;
• a search engine may control valuable search data.

The EU's 2026 DMA measures concerning Google's Android interoperability illustrate this emerging issue. The Commission required measures designed to give competing AI services effective access to relevant Android capabilities, while also addressing access to certain Google Search data.

16. Interoperability as a Future Competition Remedy

Interoperability could become one of the most important tools for digital sovereignty.

Instead of breaking up a technology company, regulators may require:

• API access;
• interoperability;
• data portability;
• common technical standards;
• access to interfaces;
• switching mechanisms; and
• non-discriminatory technical conditions.

The objective is:

Preserve the infrastructure while preventing infrastructure control from becoming exclusionary market power.

The DMA's interoperability framework is an important contemporary example. Article 6(7) requires designated gatekeepers to provide third parties access to certain operating-system hardware and software features on equivalent terms.

17. Digital Sovereignty and the DMA

The European Union's Digital Markets Act represents a significant transition from traditional ex-post competition enforcement toward ex-ante regulation of powerful digital gateways.

The EU initially designated six gatekeepers in 2023:

• Alphabet;
• Amazon;
• Apple;
• ByteDance;
• Meta; and
• Microsoft.

The current gatekeeper framework covers services including:

• search;
• app stores;
• operating systems;
• online advertising;
• social networks;
• marketplaces; and
• other core platform services. 

This architecture is important for digital sovereignty because it attempts to prevent control of a digital gateway from being converted into structural exclusion of competitors.

18. Self-Preferencing and Digital Sovereignty

Self-preferencing may become particularly important in sovereign digital infrastructure.

Consider a hypothetical cloud provider that operates:

1. a cloud infrastructure;
2. an AI platform;
3. an enterprise software marketplace; and
4. an AI application store.

If the infrastructure owner systematically favours its own AI products, competitors may lose access to customers even where they are technically capable of competing.

The competition concern therefore becomes:

Can an infrastructure provider act simultaneously as infrastructure operator and privileged downstream competitor?

This is one reason interoperability and non-discrimination rules are likely to become increasingly important.

19. Digital Sovereignty and National Champions

A major policy dilemma is whether governments should support domestic technology companies.

Possible policy instruments include:

• subsidies;
• public procurement preferences;
• tax incentives;
• strategic investment;
• research funding;
• sovereign cloud programmes;
• semiconductor subsidies;
• government-backed AI infrastructure; and
• domestic data-centre programmes.

However, competition policy must distinguish between:

Legitimate resilience policy

Supporting multiple sources of critical infrastructure.

and

Protectionism

Artificially excluding foreign competitors simply because they are foreign.

The former may increase contestability; the latter can reduce competition.

20. Public Procurement and Digital Sovereignty

Government procurement may become an important competition instrument.

Suppose a government purchases cloud infrastructure from a single provider for:

• healthcare;
• taxation;
• defence;
• courts;
• education;
• welfare;
• digital identity; and
• public records.

Long-term dependence may create:

initial procurement → technological lock-in → switching costs → reduced future competition

Competition policy should therefore consider lifecycle costs rather than merely the initial procurement price.

21. Digital Sovereignty and Merger Control

Future merger review will increasingly examine acquisitions involving:

• AI startups;
• cloud services;
• cybersecurity firms;
• data providers;
• semiconductor companies;
• foundation-model developers;
• digital identity firms; and
• interoperability technologies.

A merger may create competitive risks even where the acquired company's current revenues are modest.

The key concern may be:

Does the acquisition remove a future competitive constraint?

This is especially important where dominant technology firms repeatedly acquire promising innovators.

22. Killer Acquisitions and Digital Sovereignty

A large platform acquiring a small AI company may eliminate a potential independent technology ecosystem.

Competition authorities may therefore examine:

• innovation pipelines;
• developer communities;
• proprietary datasets;
• technical talent;
• patents;
• algorithms;
• user networks;
• interoperability technology; and
• future competitive potential.

Digital sovereignty thus moves merger control beyond current turnover and market shares toward future technological capability.

23. Digital Sovereignty and Standards

Standards can either promote competition or create technological bottlenecks.

Important areas include:

• 5G/6G;
• AI standards;
• cybersecurity;
• cloud interoperability;
• digital identity;
• IoT;
• autonomous vehicles;
• payment systems; and
• smart-city infrastructure.

If participation in standard-setting is captured by dominant firms, standards may become instruments of exclusion.

Competition law may therefore scrutinise:

• exclusion from standard-setting;
• discriminatory licensing;
• excessive licensing restrictions;
• refusal to license essential standards; and
• strategic manipulation of technical standards.

24. Digital Sovereignty and Intellectual Property

Digital sovereignty does not mean eliminating intellectual-property rights.

Instead, the future policy problem will involve balancing:

innovation incentives

against

competitive access.

This tension is especially significant for:

• AI models;
• algorithms;
• patents;
• standards-essential patents;
• software interfaces;
• datasets;
• semiconductor designs; and
• interoperability technologies.

The IMS Health line of jurisprudence demonstrates why compulsory access should generally remain carefully limited.

25. Digital Sovereignty and Competition in India

For India, the issue has particular relevance to:

• cloud infrastructure;
• digital payments;
• UPI;
• app stores;
• e-commerce;
• digital advertising;
• AI;
• data infrastructure;
• telecommunications;
• semiconductor manufacturing; and
• government digital infrastructure.

The Competition Act, 2002 can interact with other regulatory frameworks concerning:

• data;
• telecommunications;
• information technology;
• consumer protection;
• digital personal data;
• foreign investment; and
• sector-specific regulation.

The future Indian competition-policy question is likely to involve balancing:

open digital markets

with

strategic technological resilience.

26. Future Competition Policy Model

A future digital-sovereignty competition framework can be conceptualised as follows:

Layer 1 — Market power

Determine:

• market definition;
• market share;
• entry barriers;
• network effects;
• switching costs.

Layer 2 — Infrastructure control

Identify whether the undertaking controls:

• cloud;
• data;
• operating systems;
• payment infrastructure;
• AI compute;
• APIs;
• standards.

Layer 3 — Dependency

Assess:

• customer lock-in;
• technical dependency;
• data dependency;
• contractual dependency;
• interoperability barriers.

Layer 4 — Conduct

Examine:

• tying;
• bundling;
• self-preferencing;
• discrimination;
• refusal to supply;
• exclusive dealing;
• data exploitation.

Layer 5 — Sovereignty impact

Consider whether the conduct affects:

• public infrastructure;
• critical services;
• national resilience;
• technological autonomy;
• innovation capacity.

Layer 6 — Remedy

Possible remedies include:

• interoperability;
• data portability;
• access obligations;
• non-discrimination;
• structural separation;
• divestiture;
• behavioural commitments;
• merger prohibition; or
• regulatory supervision.

27. Future Competition Risks

27.1 Cloud concentration

A small number of hyperscalers could become foundational infrastructure providers.

27.2 AI concentration

A few firms could control:

• compute;
• models;
• datasets;
• distribution channels.

27.3 Data concentration

Data advantages may become increasingly difficult for entrants to replicate.

27.4 Ecosystem lock-in

Consumers and businesses may become dependent upon entire technological ecosystems rather than individual products.

27.5 Government dependence

Public administrations could become dependent upon private technology infrastructure.

27.6 Algorithmic discrimination

Algorithms may determine which competitors receive:

• visibility;
• prices;
• advertising;
• search ranking;
• customers.

27.7 Interoperability restrictions

Technical restrictions may become the modern equivalent of exclusionary contracts.

28. The Danger of Excessive Digital Sovereignty

Digital sovereignty itself can create competition problems.

Governments could potentially:

• favour domestic companies;
• restrict foreign platforms;
• impose discriminatory procurement rules;
• require unnecessary localisation;
• subsidise inefficient national champions; or
• create closed national technology ecosystems.

Such measures may reduce:

• consumer choice;
• innovation;
• investment;
• economies of scale; and
• international competition.

Therefore:

Digital sovereignty should generally mean resilience and contestability, not technological isolation.

29. Future Regulatory Architecture

A mature competition framework for digital sovereignty may require coordination between:

Competition authorities

For:

• dominance;
• cartels;
• mergers;
• exclusionary conduct.

Digital regulators

For:

• gatekeeper obligations;
• interoperability;
• platform conduct.

Data regulators

For:

• data access;
• portability;
• privacy.

Telecommunications regulators

For:

• networks;
• spectrum;
• infrastructure access.

Cybersecurity authorities

For:

• critical infrastructure security.

National-security authorities

For:

• strategic dependencies;
• foreign control.

The central challenge will be avoiding contradictory regulatory requirements.

30. Proposed Future Principles

The following principles could form the basis of future digital-sovereignty competition policy:

Principle 1 — Contestability

Strategically important digital markets should remain contestable.

Principle 2 — Interoperability

Critical digital ecosystems should not unnecessarily prevent competitors from connecting to them.

Principle 3 — Portability

Users and businesses should be capable of changing providers without prohibitive switching costs.

Principle 4 — Non-discrimination

Infrastructure operators should not unfairly favour their own downstream services.

Principle 5 — Infrastructure neutrality

Control over critical infrastructure should not automatically confer the right to exclude downstream competitors.

Principle 6 — Innovation protection

Competition policy should protect future technological competition, not merely existing competitors.

Principle 7 — Proportionality

Sovereignty measures should not unnecessarily eliminate legitimate international competition.

Principle 8 — Resilience

Governments should reduce dangerous single-provider dependencies where the infrastructure is genuinely strategic.

31. Overall Legal Framework

The future relationship can be represented as:

Digital Sovereignty

↓

Control over Data + Infrastructure + Technology

↓

Market Power

↓

Network Effects + Switching Costs + Lock-in

↓

Potential Exclusionary Conduct

↓

Competition-Law Intervention

↓

Interoperability / Portability / Non-discrimination / Structural Remedies

↓

Contestable Digital Ecosystem

The objective is therefore not simply to create domestic technology companies.

It is to ensure that no private or public actor can convert control over a critical digital layer into permanent exclusionary control over the wider digital economy.

32. Conclusion

Competition law and digital sovereignty are likely to become increasingly interconnected.

The traditional competition-law model asks whether a firm possesses and abuses market power. The emerging digital-sovereignty model adds a structural question: whether excessive dependence upon a particular technological infrastructure threatens the contestability, resilience and autonomy of downstream digital markets.

The most important future areas are likely to include:

• cloud computing;
• AI infrastructure;
• foundation models;
• semiconductors;
• data markets;
• operating systems;
• app stores;
• digital payments;
• telecommunications;
• cybersecurity;
• digital identity; and
• government technology infrastructure.

The jurisprudence of Microsoft, Google Shopping, Google Android, IMS Health, Bronner, Slovak Telekom, Qualcomm and Meta provides important foundations for analysing these developments.

The central policy challenge will be maintaining a balance:

Too little intervention can produce technological dependency and entrenched digital monopolies; too much sovereignty-based intervention can produce protectionism and closed markets.

The future of competition policy will therefore increasingly depend upon combining market contestability, interoperability, data portability, infrastructure access, innovation protection and technological resilience while preserving incentives for firms to invest and innovate.