1. Introduction

Private rulemaking power in platform ecosystems refers to the ability of a powerful digital platform to establish and enforce rules governing how other businesses, developers, consumers, advertisers, sellers, or service providers participate in the ecosystem.

Unlike traditional legislation, these rules are created by private undertakings. Yet, where a platform controls an important digital ecosystem, its private rules can have effects resembling those of public regulation.

Examples include rules concerning:

• access to an app store;
• commissions and payment systems;
• ranking and recommendation;
• seller eligibility;
• advertising;
• data access;
• interoperability;
• APIs;
• developer terms;
• content and product standards;
• switching between services;
• use of competing payment systems;
• collection and combination of data;
• contractual restrictions on business users.

The competition-law concern arises when a platform uses its rulemaking authority not merely to organise its ecosystem but to protect or extend its market power, disadvantage competitors, or restrict independent commercial behaviour.

2. Meaning of Private Rulemaking in Platform Ecosystems

A platform ecosystem normally contains several groups:

Platform owner → developers/sellers/service providers → consumers/users → advertisers/data providers

The platform establishes the rules connecting these participants.

For example, an app-store operator may decide:

• who can distribute applications;
• which payment system must be used;
• what commission is payable;
• which applications receive visibility;
• what APIs developers can access;
• what information developers receive about users.

Thus, the platform is simultaneously:

1. an infrastructure provider;
2. a market organiser;
3. a rule maker;
4. a gatekeeper; and potentially
5. a competitor to businesses operating within its ecosystem.

This creates a distinctive competition-law problem.

3. Why Private Rulemaking Can Create Competition Concerns

Private rules are not inherently unlawful.

Platforms need rules to maintain:

• security;
• interoperability;
• technical reliability;
• consumer protection;
• fraud prevention;
• quality standards.

The competition question is whether the rules are objectively connected to legitimate platform operation or instead function as mechanisms for exclusion or exploitation.

For example:

Legitimate rule

"Applications must satisfy minimum cybersecurity requirements."

This can protect users and the ecosystem.

Potentially problematic rule

"Developers must use the platform's payment system and cannot inform users about cheaper alternatives."

This may affect competition between payment providers and potentially reinforce the platform's position.

4. Private Rulemaking as a Source of Market Power

Traditional market power comes from control over:

• products;
• factories;
• distribution;
• infrastructure.

Platform power can additionally come from control over rules.

A platform may effectively determine:

Who enters → how they compete → what they pay → what information they receive → how consumers find them → whether they can leave.

Consequently, the platform's terms and policies can themselves become an important competitive instrument.

5. Relevant Competition-Law Framework

Private rulemaking can potentially engage several areas of competition law.

Article 101 TFEU / Section 3-type rules

Platform rules may constitute contractual arrangements or decisions that restrict competition.

Article 102 TFEU / abuse-of-dominance rules

Where the platform is dominant, ecosystem rules may constitute:

• exclusionary conduct;
• discriminatory treatment;
• tying;
• refusal to supply;
• self-preferencing;
• unfair conditions;
• restrictions on interoperability.

Merger control

Acquisition of important ecosystem participants may strengthen the platform's rulemaking position.

Digital-market regulation

Modern digital legislation increasingly supplements conventional competition law by imposing obligations directly on designated gatekeepers.

6. Case Law

Case 1: United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001)

Facts

Microsoft possessed a dominant position in PC operating systems. The case concerned Microsoft's conduct toward competing technologies, particularly web browsers.

Microsoft used contractual and technical arrangements involving computer manufacturers and distributors that restricted competing browser distribution.

Competition-law significance

The case illustrates an important principle for platform ecosystems:

Control over an infrastructure layer can provide the ability to establish rules affecting competition in adjacent markets.

Microsoft's operating system was not merely a product. It constituted an ecosystem through which other software reached consumers.

Relevance to private rulemaking

A platform can use its control over technical architecture and contractual relationships to establish rules determining:

• what competing products can access;
• how products are distributed;
• what functionality is available;
• how complementary products interact.

The Microsoft case therefore provides an important foundation for analysing platform rulemaking as a form of exclusionary conduct.

7. Case 2: Ohio v. American Express Co., 585 U.S. 529 (2018)

Facts

American Express operated a two-sided payment-card network connecting merchants and cardholders.

Its merchant agreements contained anti-steering provisions restricting merchants from encouraging customers to use alternative payment methods.

Supreme Court's Approach

The U.S. Supreme Court treated the credit-card network as a two-sided transaction platform and considered both sides of the platform in assessing competitive effects.

Relevance

This case is particularly important for private rulemaking.

American Express used contractual rules to determine how merchants could interact with customers concerning competing payment systems.

It demonstrates that platform rules cannot necessarily be assessed solely by examining one side of the ecosystem.

Principle

Where a platform connects two distinct user groups, competition analysis may need to consider the interdependence between those sides.

8. Case 3: Epic Games, Inc. v. Apple Inc.

Facts

Epic Games challenged Apple's App Store rules, including Apple's requirement that certain digital purchases use Apple's payment system and the associated commission structure.

Epic introduced its own payment mechanism, resulting in Apple's removal of Fortnite from the App Store.

Competition-law significance

The dispute directly concerns private rulemaking power.

Apple established rules governing:

• application distribution;
• payment mechanisms;
• developer conduct;
• commissions;
• access to consumers.

The litigation therefore illustrates how a platform's contractual rules can become central to competition between the platform and businesses operating on it.

Important lesson

The legal analysis requires separating:

1. legitimate technical or security rules;
2. commercial terms necessary for platform operation; and
3. rules that potentially suppress competing services.

The case also demonstrates the importance of carefully defining the relevant market before determining whether a platform's rules constitute anticompetitive conduct.

9. Case 4: Google Android — European Commission, Case AT.40099

Facts

The European Commission investigated Google's conduct concerning the Android ecosystem.

The Commission addressed restrictions involving:

• Google Search;
• Google Chrome;
• licensing of Android;
• device manufacturers;
• app distribution.

Among the issues examined were contractual conditions imposed on manufacturers and the way Google's ecosystem arrangements affected competing services.

Competition-law significance

Android demonstrates that an operating system can function as an ecosystem within which the platform owner establishes rules affecting multiple markets.

Google's contractual conditions influenced:

• what manufacturers could distribute;
• which applications could be pre-installed;
• how competing services reached users.

Principle

Platform rules can produce competition effects beyond the immediate market in which the platform operates.

A rule concerning operating-system licensing can affect search, browsers, applications and advertising.

10. Case 5: Google Shopping — European Commission, Case AT.39740

Facts

The European Commission found that Google had favoured its own comparison-shopping service in general search results relative to competing comparison-shopping services.

Relevance to private rulemaking

Search-ranking rules are a form of private governance.

Google effectively establishes the rules determining:

• which results appear;
• their position;
• their visibility;
• how users encounter competing services.

Where the platform also competes with the businesses affected by those rules, a conflict can arise between:

rule maker + infrastructure operator + competitor.

Competition principle

Control over ranking and visibility can constitute an important source of platform power.

Private rulemaking therefore extends beyond written contracts to algorithmic rules and ranking mechanisms.

11. Case 6: Google AdSense — European Commission, Case AT.40411

Facts

The European Commission examined contractual restrictions imposed by Google in relation to search advertising intermediation.

Google's agreements with publishers restricted the placement of competing search advertisements.

Competition significance

This demonstrates that private platform rules can restrict the commercial freedom of ecosystem participants.

The relevant rules were not conventional legislation; they were contractual conditions imposed through Google's platform relationships.

Principle

Where a dominant platform establishes contractual conditions that disadvantage competing services, competition authorities may examine whether those conditions produce exclusionary effects.

12. Case 7: Apple App Store — European Commission / Digital Markets Enforcement

Apple's App Store practices have generated extensive European competition and digital-market scrutiny.

The relevant issues have included:

• mandatory payment mechanisms;
• commissions;
• anti-steering restrictions;
• alternative distribution;
• developer access;
• terms governing business users.

Competition-law significance

The App Store illustrates the phenomenon of private regulation of an ecosystem.

Apple determines rules concerning:

entry → distribution → payment → communication with users → commercial terms.

The platform therefore performs functions that resemble market governance.

The competition question is whether particular rules are necessary for the ecosystem or whether they suppress competing distribution or payment channels.

13. Case 8: Meta Platforms / Facebook — Bundeskartellamt

The German competition authority's proceedings concerning Facebook examined the combination of user data obtained from different sources and Facebook's position in the social-networking market.

The case ultimately reached the Court of Justice of the European Union in Case C-252/21, Meta Platforms Inc. and Others v Bundeskartellamt.

Competition significance

The case demonstrates that platform rulemaking can involve data conditions imposed on users.

The relevant issue is not only price.

Platform terms may govern:

• what data is collected;
• how data is combined;
• what services users must accept together;
• how participation in the ecosystem is conditioned.

Principle

Competition analysis in digital ecosystems can therefore extend to non-price contractual conditions, particularly where data is an important competitive resource.