Competition Law and Smart Infrastructure Gatekeeper Power

1. Introduction

Smart infrastructure refers to digitally connected physical infrastructure in which sensors, software, data platforms, cloud systems, connectivity networks, artificial intelligence and automated decision-making are integrated into traditional infrastructure. Examples include smart grids, intelligent transport systems, smart buildings, connected water systems, EV-charging networks, digital tolling, smart ports and municipal IoT platforms.

A gatekeeper in smart infrastructure is an undertaking that occupies a strategically important position between infrastructure operators, technology providers, businesses and users and can control or materially influence access to an essential digital or physical ecosystem.

Gatekeeper power creates competition concerns because the infrastructure operator may simultaneously act as:

• infrastructure owner;
• platform operator;
• data controller;
• software provider;
• marketplace intermediary;
• standards setter; and
• competitor to firms dependent upon its infrastructure.

The principal competition-law issue is therefore whether control over smart infrastructure can be leveraged to exclude competitors or distort downstream competition.

2. Meaning of Gatekeeper Power

Gatekeeper power generally arises where an undertaking controls an important access point through which competitors or customers must pass.

In smart infrastructure, this may occur through:

1. Physical infrastructure control – roads, charging stations, ports, electricity networks or telecommunications infrastructure.
2. Digital infrastructure control – operating systems, cloud platforms, APIs and data platforms.
3. Data control – exclusive access to real-time operational or consumer data.
4. Interoperability control – determining which devices, applications or platforms can connect.
5. Standards control – setting technical specifications that competitors must satisfy.
6. Platform control – determining rankings, access, commissions and participation rules.
7. Algorithmic control – automated allocation of access, prices or visibility.
8. Ecosystem control – bundling infrastructure access with proprietary software or services.

Thus, gatekeeper power does not necessarily depend upon traditional market share alone.

3. Competition-Law Framework

The principal legal theories potentially applicable to smart-infrastructure gatekeepers include:

A. Abuse of Dominant Position

A dominant infrastructure operator may abuse its position through:

• discriminatory access;
• exclusionary pricing;
• tying and bundling;
• refusal to supply;
• self-preferencing;
• loyalty-inducing arrangements;
• excessive or discriminatory charges;
• degradation of interoperability;
• discriminatory data access.

B. Refusal to Deal / Essential-Facility-Type Conduct

Where competitors cannot reasonably reproduce a particular infrastructure and access is indispensable for effective competition, refusal or discriminatory restriction may raise competition concerns.

C. Tying and Bundling

A gatekeeper may require infrastructure users to purchase its:

infrastructure + software + cloud + maintenance + payment + data services

rather than permitting competing suppliers.

D. Self-Preferencing

The infrastructure operator may give its own downstream services:

• better access;
• preferential data;
• higher rankings;
• faster processing;
• better API functionality; or
• preferential infrastructure capacity.

E. Interoperability Restrictions

A gatekeeper can potentially weaken competition by preventing rival systems from communicating with its infrastructure.

F. Data-Related Foreclosure

Control over infrastructure-generated data may give the gatekeeper an informational advantage that competitors cannot replicate.

4. Why Smart Infrastructure Creates Special Gatekeeper Problems

Traditional infrastructure already has natural-monopoly characteristics in certain circumstances. Digitalisation can increase those characteristics.

For example:

Smart electricity grid

Physical grid → smart meter → communications network → data platform → analytics → energy-management application

If the same undertaking controls every layer, competitors may become dependent upon it at several points simultaneously.

This creates a phenomenon sometimes described as vertical ecosystem foreclosure.

5. Major Competition Concerns

5.1 Refusal of Infrastructure Access

A dominant operator may refuse access to its smart infrastructure.

Examples:

• EV charging network refusing access to rival charging applications;
• smart-grid operator refusing access to competing aggregators;
• smart-port operator excluding competing logistics platforms;
• smart-building platform preventing rival energy-management providers from connecting.

The competition question is whether access is genuinely indispensable and whether refusal can eliminate or substantially restrict effective competition.

5.2 Discriminatory Access

Even where access is technically available, the gatekeeper may discriminate.

For example:

Such discrimination can be particularly serious when competitors cannot realistically bypass the infrastructure.

6. Self-Preferencing

Smart infrastructure can allow an infrastructure owner to compete downstream.

For example:

Smart-grid operator → owns grid data → operates energy-management application

It could potentially use information obtained through infrastructure operation to favour its own application.

The same problem may arise with:

• smart parking;
• EV charging;
• intelligent transportation;
• smart-building management;
• logistics;
• cloud-connected infrastructure.

The competition-law assessment normally requires examination of the actual competitive effects rather than assuming that every instance of vertical integration is unlawful.

7. Data as a Source of Gatekeeper Power

Smart infrastructure continuously generates data.

Examples include:

• electricity consumption;
• vehicle movements;
• charging behaviour;
• traffic patterns;
• building occupancy;
• logistics flows;
• water consumption;
• equipment performance.

A gatekeeper controlling this information may acquire a substantial competitive advantage.

Potential theories

Data-related conduct may involve:

1. refusal to provide access;
2. discriminatory data access;
3. excessive restrictions on portability;
4. combining infrastructure data with other datasets;
5. using commercially sensitive information to compete against infrastructure users.

The competition issue becomes stronger where the data is:

• difficult to reproduce;
• continuously generated;
• necessary for competing services; and
• unavailable through commercially reasonable alternatives.

8. Interoperability and API Restrictions

Interoperability is central to smart infrastructure.

Suppose a city operates a smart-infrastructure platform that accepts only its proprietary API.

Competitors may be technically unable to provide:

• analytics;
• maintenance;
• energy-management;
• mobility;
• cybersecurity; or
• optimisation services.

A gatekeeper can therefore potentially create technological foreclosure without physically excluding competitors.

9. Tying and Bundling

A smart-infrastructure provider may condition access to infrastructure upon purchasing additional services.

For example:

Access to charging infrastructure
↓
compulsory proprietary payment system
↓
compulsory cloud service
↓
compulsory analytics platform

Competition law may examine whether the tied products constitute separate products, whether the undertaking has market power in the tying product and whether the practice can foreclose competitors.

10. Gatekeeper Power Through Standards

Standards can provide substantial competitive advantages.

A dominant infrastructure operator may control:

• technical protocols;
• certification requirements;
• cybersecurity standards;
• communication interfaces;
• charging standards;
• data formats.

A standard may be legitimate and technically necessary. However, competition concerns can arise if standards are manipulated to exclude competing technologies without sufficient objective justification.

11. Six Important Case Laws

The following cases provide useful legal principles for analysing gatekeeper power in smart infrastructure.

1. United Brands v Commission

United Brands Company v Commission, Case 27/76, European Court of Justice (1978).

Principle

The Court examined dominance through the undertaking's ability to behave independently of competitors, customers and consumers.

Relevance

A smart-infrastructure operator with substantial control over an infrastructure market may possess dominance where customers and downstream providers have limited alternatives.

The case is useful for analysing:

• market power;
• customer dependence;
• infrastructure-based dominance;
• barriers to entry.

12. Bronner v Mediaprint

Oscar Bronner GmbH & Co. KG v Mediaprint, Case C-7/97, European Court of Justice (1998).

Principle

The Court established a demanding framework for refusal-to-supply claims involving infrastructure.

Among the important considerations were whether:

1. access is indispensable;
2. there is no actual or potential substitute;
3. duplication is impossible or economically unreasonable; and
4. refusal would eliminate effective competition.

Smart-Infrastructure Application

The Bronner framework is highly relevant to:

• smart-grid access;
• EV charging networks;
• smart transport systems;
• telecommunications infrastructure;
• smart-port systems.

It demonstrates that not every refusal by an infrastructure owner constitutes an antitrust violation.

13. IMS Health v NDC Health

IMS Health GmbH & Co. KG v NDC Health GmbH & Co. KG, Joined Cases C-241/91 P and C-242/91 P, European Court of Justice (2004).

Principle

The case developed the exceptional circumstances doctrine concerning access to indispensable intellectual property.

The Court considered circumstances involving:

• indispensability;
• elimination of effective competition;
• prevention of a new product or service;
• lack of objective justification.

Smart-Infrastructure Application

The reasoning can inform disputes involving proprietary:

• infrastructure software;
• technical datasets;
• digital interfaces;
• infrastructure platforms; and
• proprietary technical systems.

14. Microsoft v Commission

Microsoft Corp. v Commission, Case T-201/04, General Court of the European Union (2007).

Principle

Microsoft's conduct concerning interoperability information and tying was extensively examined under EU competition law.

The case demonstrates how control over a technological platform can affect competition in neighbouring markets.

Smart-Infrastructure Application

The case is particularly relevant to:

• interoperability;
• proprietary interfaces;
• platform control;
• technological ecosystems;
• tying and bundling.

A smart-infrastructure platform can similarly become an access point for downstream technological services.

15. Google Shopping

Google Search (Shopping), Case AT.39740, European Commission decision (2017), subsequently considered by the EU Courts.

Principle

The case concerned Google's treatment of its own comparison-shopping service in general search results.

The Commission's theory involved Google's:

• dominance in general search;
• systematic favourable positioning of its own service;
• disadvantage imposed on competing comparison-shopping services.

Smart-Infrastructure Application

The case is important for analysing self-preferencing.

A smart-city platform could potentially:

collect information from third-party service providers → control platform visibility → favour its own competing service.

Comparable concerns could arise in:

• mobility platforms;
• smart parking;
• charging platforms;
• logistics platforms;
• smart-energy marketplaces.

16. Slovak Telekom v Commission

Slovak Telekom a.s. v European Commission, Joined Cases C-165/19 P and C-166/19 P, Court of Justice of the European Union (2021).

Principle

The case concerned access to telecommunications infrastructure and exclusionary conduct involving a dominant operator.

It is particularly significant for analysing the relationship between dominant infrastructure ownership and downstream competition.

Smart-Infrastructure Application

The reasoning is relevant to:

• telecommunications infrastructure;
• fibre networks;
• IoT connectivity;
• smart-city communications;
• connected infrastructure.

It illustrates how infrastructure control can provide a platform for exclusionary conduct in downstream markets.

17. Additional Important Case: Deutsche Telekom

Deutsche Telekom AG v Commission, Case C-280/08 P, Court of Justice of the European Union (2010).

Principle

The case concerned pricing practices involving access to telecommunications infrastructure and downstream competitors.

The Court addressed the application of the abuse-of-dominance framework to vertically integrated infrastructure markets.

Smart-Infrastructure Application

It is useful for studying:

• infrastructure access pricing;
• margin squeeze;
• vertical integration;
• downstream foreclosure.

The principle can be adapted to smart infrastructure where a vertically integrated operator controls infrastructure while competing downstream.

18. Additional Important Case: MEO v Autoridade da Concorrência

MEO – Serviços de Comunicações e Multimédia SA v Autoridade da Concorrência, Case C-525/16, Court of Justice of the European Union (2018).

Principle

The Court examined discriminatory pricing and the requirement to consider whether conduct places competitors at a competitive disadvantage.

Smart-Infrastructure Application

This is relevant where a gatekeeper charges different infrastructure-access prices to competing service providers.

For example:

Operator A → ₹X access fee
Operator B → ₹3X access fee

The legal assessment requires consideration of the relevant circumstances and actual or potential competitive disadvantage.

19. Consolidated Case-Law Table

20. Smart Grid Example

Consider a dominant smart-grid operator.

It owns:

• electricity distribution infrastructure;
• smart meters;
• grid-management software;
• consumer energy data; and
• an energy-management platform.

It also operates an energy-aggregation service.

Potential competition concerns include:

1. Data foreclosure

Competitors cannot obtain real-time consumption information.

2. API foreclosure

Only the operator's software can communicate effectively with smart meters.

3. Self-preferencing

The operator gives its own energy-management application superior access.

4. Bundling

Grid access is conditioned upon using the operator's software.

5. Discriminatory pricing

Independent aggregators pay substantially more for equivalent infrastructure access.

6. Capacity discrimination

The operator reserves network capacity for its affiliated downstream business.

The competition authority would need to examine market definition, dominance, indispensability, justification and competitive effects.

21. Smart-City Example

A smart-city platform may integrate:

traffic + parking + public transport + payments + surveillance infrastructure + IoT sensors + mobility applications.

Suppose the city grants one platform operator exclusive control over the underlying data and APIs.

The operator subsequently launches its own mobility application.

Potential issues include:

• exclusion of competing applications;
• discriminatory API access;
• preferential ranking;
• data advantages;
• tying;
• interoperability restrictions;
• discriminatory transaction fees.

The important question is whether the platform's conduct protects legitimate infrastructure objectives or instead unnecessarily restricts competition.

22. Essential-Facility Dimension

The essential-facility doctrine should be applied cautiously.

Not every important facility is an essential facility.

A competition authority would generally examine:

1. Is the undertaking dominant?
2. Is the infrastructure objectively indispensable?
3. Are realistic alternatives available?
4. Can competitors economically reproduce it?
5. Would refusal eliminate effective competition?
6. Is access technically feasible?
7. Is there an objective justification for refusal?
8. Can access be provided without compromising security or infrastructure integrity?

This balancing is particularly important in smart infrastructure because cybersecurity and reliability may constitute legitimate reasons for restricting access.

23. Cybersecurity and Legitimate Justification

A gatekeeper should not automatically be required to provide unrestricted access.

Smart infrastructure may involve:

• critical electricity systems;
• emergency communications;
• transport safety;
• water systems;
• cybersecurity controls;
• personal data;
• national-security considerations.

Therefore, restrictions may be objectively justified where they are:

• necessary;
• proportionate;
• technically justified;
• transparent; and
• applied consistently.

A competition analysis should distinguish genuine security restrictions from security requirements that are selectively applied to disadvantage competitors.

24. Remedies

Competition authorities may consider several remedies.

Structural remedies

• divestiture;
• separation of infrastructure and downstream activities;
• ownership separation.

Behavioural remedies

• non-discriminatory access;
• transparent pricing;
• interoperability obligations;
• API access;
• data portability;
• prohibition of self-preferencing;
• non-discrimination requirements.

Governance remedies

• independent access-management systems;
• auditing;
• algorithmic transparency;
• compliance monitoring;
• information firewalls.

25. Competition-Law Compliance Framework for Smart-Infrastructure Gatekeepers

A smart-infrastructure operator should maintain:

Access governance

Clear and objective access criteria.

Data governance

Equal and transparent data-access policies.

API governance

Interoperability that does not unnecessarily discriminate.

Pricing governance

Objective infrastructure-access pricing.

Algorithm governance

Controls against discriminatory allocation and self-preferencing.

Vertical-integration safeguards

Information firewalls between infrastructure operations and downstream businesses.

Merger controls

Special scrutiny of acquisitions involving:

• infrastructure;
• data;
• interoperability platforms;
• IoT ecosystems;
• competing digital services.

26. Emerging Competition Issues

Future disputes are likely to involve:

• AI-controlled infrastructure;
• autonomous transport systems;
• smart-grid aggregators;
• EV charging ecosystems;
• digital twins;
• cloud-controlled infrastructure;
• smart-port platforms;
• 5G/6G infrastructure;
• urban operating systems;
• connected buildings;
• infrastructure-generated datasets.

The central question will increasingly be:

Who controls the gateway through which competitors must reach consumers, infrastructure or data?

27. Conclusion

Gatekeeper power in smart infrastructure arises from the combination of physical infrastructure, digital platforms, data, interoperability and vertical integration.

Traditional dominance principles remain important, but smart infrastructure creates additional forms of market power because the gatekeeper can control several competitive inputs simultaneously.

The principal competition-law risks are:

• refusal of access;
• discriminatory access;
• self-preferencing;
• tying and bundling;
• interoperability restrictions;
• data foreclosure;
• discriminatory pricing;
• margin squeeze;
• leveraging infrastructure dominance into adjacent markets.

The cases of United Brands, Bronner, IMS Health, Microsoft, Google Shopping, Slovak Telekom, Deutsche Telekom and MEO provide a useful doctrinal foundation for analysing these problems.