Competition Law and Strategic Taxonomy Ownership and Antitrust

1. Introduction

Strategic taxonomy ownership refers to a situation in which an undertaking controls the system by which products, services, firms, data, users, technologies, or transactions are classified, labelled, ranked, authenticated, or categorized within a market.

A taxonomy may appear to be merely an information-management device, but in a digital or data-intensive economy it can become a form of competitive infrastructure. Whoever controls the taxonomy may influence:

• which products qualify for a particular category;
• how consumers search for and compare products;
• which firms are visible or discoverable;
• eligibility for platforms, procurement systems, or marketplaces;
• interoperability between competing technologies;
• access to industry databases;
• ratings, rankings and recommendation systems;
• classification of competitors as compliant, non-compliant, premium or inferior;
• market definition itself;
• access to downstream customers.

Competition law therefore does not ordinarily prohibit ownership of a taxonomy. The legal concern arises where a firm with substantial market power uses control over a strategically important classification system to exclude competitors, discriminate between rivals, foreclose entry, manipulate interoperability, or extend dominance into an adjacent market.

The FTC has recognized that standards and certification systems can have procompetitive benefits, while also warning that competitors may manipulate standard-setting processes to exclude rivals.

2. Meaning of Strategic Taxonomy Ownership

A taxonomy is essentially a structured classification architecture.

For example:

Products → Categories → Subcategories → Eligibility criteria → Ranking → Consumer visibility

A company controlling that architecture may possess several forms of strategic power.

A. Classification power

The owner determines whether a product belongs to:

• “premium”;
• “standard”;
• “eco-friendly”;
• “certified”;
• “compatible”;
• “enterprise”;
• “high risk”;
• “low risk.”

A classification can materially affect consumer demand.

B. Visibility power

A platform may determine which categories receive:

• prominent search placement;
• recommendation;
• advertising eligibility;
• preferred badges;
• automatic inclusion.

C. Eligibility power

The taxonomy can establish technical or commercial requirements for participation.

A competitor failing to satisfy the owner's classification rules may effectively be excluded.

D. Interoperability power

A taxonomy may determine how different systems understand and exchange information.

This becomes especially important in:

• cloud computing;
• healthcare databases;
• financial APIs;
• artificial intelligence;
• telecommunications;
• IoT;
• smart grids;
• e-commerce.

E. Information power

Control over the classification of market information can create an informational advantage that competitors cannot easily replicate.

3. Why Taxonomy Ownership Can Become an Antitrust Issue

The fundamental distinction is:

Ownership is not itself unlawful; exclusionary exploitation of ownership may be.

A company can ordinarily develop its own classification system. Competition law becomes relevant where several additional conditions appear.

3.1 Market power

The undertaking must possess sufficient power in a relevant market.

3.2 Strategic importance

The taxonomy must have substantial significance for competition.

For example, it might determine:

• market access;
• consumer discovery;
• interoperability;
• certification;
• technical compatibility.

3.3 Competitor dependence

Competitors may have no practical alternative classification system.

3.4 Exclusionary conduct

The owner may:

• deny access;
• impose discriminatory criteria;
• manipulate classifications;
• downgrade competitors;
• give itself preferential treatment;
• refuse interoperability;
• impose unreasonable certification requirements.

3.5 Competitive effects

The conduct must have potential or actual effects such as:

• foreclosure;
• reduced innovation;
• higher barriers to entry;
• reduced consumer choice;
• weakening of rivals;
• restriction of technical development.

4. Strategic Taxonomy Ownership and Article 102 TFEU

Under Article 102 TFEU, the central question is whether a dominant undertaking abuses its position.

Taxonomy ownership can potentially fall within several forms of abusive conduct.

A. Refusal to provide access

Where a dominant firm controls a classification structure indispensable for downstream competition, refusal of access may raise the essential-facilities/refusal-to-deal issue.

The EU case law emphasizes indispensability, elimination of effective competition and objective justification in relevant access cases.

B. Discriminatory classification

If the dominant company applies one taxonomy to competitors but a more favorable classification to itself, competition concerns may arise.

C. Self-preferencing

A platform could classify its own products more favorably and place them in more advantageous categories.

D. Leveraging

The undertaking may use dominance in one classification or information market to obtain an advantage in another market.

E. Innovation foreclosure

A taxonomy may prevent new technological models from being recognized as eligible competitors.

5. Strategic Taxonomy Ownership and Section 2 of the Sherman Act

In the United States, taxonomy-related conduct may potentially be examined under Section 2 of the Sherman Act where a monopolist or dominant firm uses exclusionary conduct to maintain or acquire monopoly power.

The critical distinction is between:

legitimate competitive advantage

and

exclusionary maintenance of monopoly power.

The FTC describes monopolization concerns in terms of maintaining or acquiring monopoly power through unreasonable exclusionary methods rather than merely possessing monopoly power.

Taxonomy control can therefore become relevant where it is used as an instrument for:

• exclusion;
• discriminatory access;
• foreclosure;
• interoperability restrictions;
• manipulation of market information.

6. Strategic Taxonomy Ownership and Standard Setting

Taxonomies frequently resemble private standards.

Standards can be highly beneficial because they:

• reduce information costs;
• facilitate compatibility;
• allow consumers to compare products;
• promote interoperability;
• improve quality assurance.

The FTC has expressly recognized these procompetitive benefits.

However, standard-setting can become anticompetitive when competitors use the process to:

• exclude a rival;
• select standards designed to disadvantage competing technology;
• prevent innovative products from qualifying;
• manipulate certification;
• deny access to necessary technical information.

Thus:

Taxonomy + market power + exclusionary manipulation = potential antitrust concern.

7. Major Case Laws

1. Magill TV Guide/RTÉ and ITP

Cases: Joined Cases C-241/91 P and C-242/91 P, RTE and ITP v Commission.

Facts

Television broadcasters controlled basic programme information. Third-party publishers wanted to produce comprehensive television guides using that information.

The broadcasters refused to license the information.

Legal principle

The EU courts developed important principles concerning refusal to license intellectual property by a dominant undertaking.

The case established circumstances in which control over information protected by intellectual-property rights can acquire competition-law significance.

Relevance to taxonomy ownership

A taxonomy can similarly become strategically important where:

information → classification → market access

If competitors cannot realistically operate without access to a classification structure, refusal of access may attract closer scrutiny.

2. IMS Health v NDC Health

Case: C-418/01, IMS Health GmbH & Co. OHG v NDC Health GmbH & Co. KG.

Facts

IMS Health developed a detailed geographical data structure—the famous 1860 brick structure—for pharmaceutical sales information in Germany.

The structure became widely used by the pharmaceutical industry.

Legal significance

The Court considered when refusal to license an intellectual-property-protected structure could constitute abuse of dominance.

The case is particularly important because the classification structure had become an industry standard.

Relevance to taxonomy ownership

This is one of the closest conceptual precedents for strategic taxonomy ownership.

A classification system can move from:

private intellectual creation

to:

industry infrastructure.

Once competitors become dependent upon the structure, ownership acquires greater competitive significance.

8. Microsoft v Commission

Case: T-201/04, Microsoft Corp. v Commission.

Facts

Microsoft controlled the dominant Windows client PC operating-system environment and withheld certain interoperability information from competitors in the work-group server operating-system market.

Legal principle

The EU courts upheld the Commission's findings concerning Microsoft's refusal to provide interoperability information.

The case is significant because competition law treated technological information as potentially critical to effective competition.

Relevance to taxonomy ownership

A taxonomy may similarly determine how competing systems communicate.

For example:

Platform A's taxonomy → product identifier → data classification → API → downstream service.

If competitors cannot interoperate because the dominant undertaking controls the relevant classification architecture, competition concerns can arise.

The Microsoft case therefore demonstrates how non-physical technological control can become strategically important competitive infrastructure.

9. Bronner v Mediaprint

Case: C-7/97, Oscar Bronner GmbH & Co. KG v Mediaprint.

Facts

Bronner sought access to Mediaprint's newspaper distribution system.

Legal principle

The Court established demanding conditions for treating refusal of access as an abuse, including the importance of:

1. indispensability;
2. lack of an actual or potential substitute;
3. potential elimination of competition;
4. absence of objective justification.

The EU General Court continues to describe these as central elements of the traditional essential-facilities analysis.

Relevance

Suppose a dominant technology company owns the taxonomy through which an entire industry classifies products.

The relevant question would not simply be:

“Does the company own the taxonomy?”

It would be:

“Is access genuinely indispensable for effective downstream competition, and are viable alternatives unavailable?”

Thus, Bronner prevents competition law from automatically converting every proprietary classification system into a mandatory shared facility.

10. Google Shopping

Case: T-612/17, Google and Alphabet v Commission.

Facts

The European Commission found that Google had favored its own comparison-shopping service in its general search results while competing comparison-shopping services received less favorable treatment.

The General Court upheld the essential elements of the Commission's finding.

Relevance to taxonomy ownership

Google Shopping is important for understanding classification and visibility power.

A digital platform can influence competition not merely by owning a physical facility but by controlling:

• categorization;
• ranking;
• placement;
• visibility;
• presentation.

The EU General Court described the alleged conduct as treating Google's own comparison-shopping service differently from competing services within general search results.

A taxonomy owner could similarly classify:

its own product → preferred category → higher visibility

while classifying:

rival product → inferior category → reduced visibility.

The legal issue would depend on dominance, conduct, competitive effects and applicable rules—not simply the existence of differentiated treatment.

11. Google Android

Case: Google Android, Commission Decision of 18 July 2018, subsequently litigated before the EU courts.

Facts

The case concerned Google's conduct concerning Android and associated applications and services, including restrictions connected with the Android ecosystem.

Relevance

Android demonstrates how control over a technological ecosystem can facilitate leveraging across interconnected markets.

A taxonomy can operate similarly.

For example:

Operating system
↓
App classification
↓
Eligibility
↓
Search visibility
↓
Consumer access

The owner can potentially influence competition at several levels of the ecosystem.

12. Alphabet / Android Auto

Case: C-233/23, Alphabet and Others (Android Auto), judgment of 25 February 2025.

This case is particularly relevant to modern taxonomy and ecosystem questions.

The Court considered refusal to provide interoperability with a digital platform and clarified that the traditional Bronner criteria do not automatically apply in every refusal to interoperate involving a digital platform generally open to third-party complementors.

Relevance

Modern taxonomy systems may be embedded inside open digital ecosystems.

For example:

Digital platform → taxonomy → developer classification → compatibility → consumer access.

This means that competition analysis increasingly has to distinguish between:

• a genuinely proprietary asset;
• an ecosystem interface;
• an open platform;
• an industry-standard classification;
• a strategically indispensable digital infrastructure.

13. Commercial Solvents

Cases: Joined Cases 6/73 and 7/73, Instituto Chemioterapico Italiano and Commercial Solvents v Commission.

Principle

The case established an important principle concerning a dominant undertaking's conduct involving an upstream input and downstream competition.

The EU courts continue to cite Commercial Solvents as part of the development of refusal-to-supply jurisprudence.

Relevance

A taxonomy may constitute an informational upstream input.

For example:

Taxonomy owner
↓
Classification information
↓
Downstream market
↓
Competing products.

If the dominant undertaking restricts the input to disadvantage downstream competitors, the conduct can potentially be examined as exclusionary leveraging.

14. Terminal Railroad Association

Case: United States v. Terminal Railroad Association of St. Louis, 224 U.S. 383 (1912).

Principle

The case is a foundational U.S. authority concerning control over strategically important infrastructure.

The underlying concept is highly relevant to modern digital infrastructure.

Relevance to taxonomy

A modern classification architecture can sometimes function like an informational gateway:

Classification system → eligibility → market participation.

The analogy does not mean every taxonomy is an essential facility. Rather, the case helps explain why control over a strategically indispensable gateway can have antitrust significance.

15. Aspen Skiing

Case: Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985).

Principle

The Supreme Court considered the significance of a dominant firm's termination of a previously beneficial course of dealing with a rival.

Relevance

Imagine that a dominant taxonomy operator historically allowed competitors to participate in its classification system, and then deliberately withdraws access in a manner that harms competition.

The Aspen Skiing framework can become relevant to the analysis of:

• prior cooperation;
• termination;
• competitive justification;
• exclusionary purpose/effect.

It does not, however, establish a general duty for every dominant company to share proprietary systems.

16. Verizon v Trinko

Case: Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, 540 U.S. 398 (2004).

Principle

The Supreme Court was cautious about imposing broad duties on firms to assist competitors.

Relevance to taxonomy ownership

This provides an important counterweight to the essential-facilities analogy.

A company does not automatically violate antitrust law merely because:

“Competitors would benefit if they had access to its taxonomy.”

The legal analysis must establish the relevant antitrust requirements.

17. Comparative Legal Framework

18. Forms of Anticompetitive Strategic Taxonomy Ownership

A. Taxonomy foreclosure

The owner prevents competitors from entering the classification system.

Example:

A dominant marketplace refuses to recognize competing products within its principal product categories.

B. Taxonomy discrimination

Competitors technically receive access, but the owner applies different standards.

Example:

Rival products are placed in secondary categories while the owner's products qualify for premium classifications.

C. Self-preferencing

The dominant undertaking gives its own products preferential classifications.

Example:

“Certified products” category → dominant firm's products automatically qualify → rival products face additional requirements.

D. Taxonomy tying

Access to one classification system is conditioned on purchasing another service.

Example:

Certification taxonomy + mandatory advertising package.

E. Taxonomy exclusion through interoperability

A competitor cannot participate because its data cannot be mapped into the dominant taxonomy.

This is particularly significant in:

• healthcare;
• fintech;
• AI;
• cloud;
• IoT;
• telecommunications.

F. Taxonomy manipulation

The classification rules are changed selectively to disadvantage competitors.

Potential examples include:

• changing eligibility thresholds;
• altering category definitions;
• redefining product attributes;
• removing competitors from a category;
• changing ranking parameters.

19. Strategic Taxonomy Ownership and Market Definition

Taxonomies also have an unusual relationship with market definition.

Traditional competition law asks:

What products compete with each other?

But the taxonomy owner may effectively determine:

Which products are placed in the same category.

This creates a potential feedback loop:

Taxonomy → perceived substitutes → consumer search → demand → market structure

For digital markets, this is particularly significant.

For example, if a platform categorizes:

• Product A as a substitute for Product B;
• but Product C as a completely different category,

that classification may affect consumer substitution even if the products are technically competitive.

Competition authorities should therefore distinguish between:

1. legal market definition, determined by competition analysis; and
2. private taxonomy, created by a commercial undertaking.

A company's taxonomy cannot automatically dictate the legally relevant market.

20. Strategic Taxonomy Ownership and Data

Taxonomy ownership increasingly overlaps with data ownership.

A dominant undertaking may control:

• product identifiers;
• category trees;
• metadata;
• consumer tags;
• seller classifications;
• transaction labels;
• industry codes;
• machine-readable ontologies.

The competitive value may lie less in the underlying data and more in the structure imposed upon the data.

This produces:

Data + taxonomy + algorithm = informational market power

21. AI and Algorithmic Taxonomies

AI systems make the issue even more significant.

An AI platform may classify businesses, products or users through machine-generated categories.

For example:

Business data → AI classification → recommendation category → ranking → consumer demand.

Potential competition concerns include:

1. Biased classification

Rivals receive systematically less favorable classifications.

2. Proprietary ontology

The dominant AI company controls the terminology necessary for participation.

3. Training-data advantage

The owner uses market data obtained through its classification ecosystem to improve its competing product.

4. Dynamic exclusion

The taxonomy automatically changes in ways that disadvantage competitors.

5. Black-box classification

Competitors cannot determine why their products have been excluded or downgraded.

Competition authorities may therefore need to examine not only ownership of the taxonomy, but also:

• governance;
• transparency;
• interoperability;
• access conditions;
• algorithmic decision-making;
• discriminatory effects.

22. Taxonomy Governance as a Competition Issue

An important modern distinction is between ownership and governance.

A taxonomy controlled by a single firm can create concerns where that firm simultaneously acts as:

rule-maker + platform operator + competitor + judge of compliance.

For example:

1. Company creates category rules.
2. Company determines compliance.
3. Company operates the marketplace.
4. Company sells competing products.
5. Company ranks products.

This creates an institutional conflict that can magnify exclusionary incentives.

A competition authority may therefore examine:

• who creates the rules;
• who can amend them;
• whether competitors participate;
• whether criteria are transparent;
• whether standards are objectively related to legitimate purposes;
• whether equivalent firms receive equivalent treatment.

The FTC has specifically noted that standard-setting programs can be distorted by competitors seeking to reduce competition, particularly where compliance with a standard effectively determines whether a product can succeed in the market.

23. Legitimate Business Justifications

Taxonomy ownership can have substantial legitimate purposes.

A firm may reasonably classify products to:

• improve consumer search;
• prevent fraud;
• ensure safety;
• maintain quality;
• facilitate interoperability;
• comply with regulation;
• reduce information asymmetry;
• protect cybersecurity;
• distinguish technically different products.

Therefore:

Different treatment is not automatically discriminatory or unlawful.

The critical question is whether the classification is objectively connected to a legitimate purpose or is being used as an exclusionary device.

24. Competition-Law Test

A useful analytical framework is:

Step 1 — Identify the taxonomy

What exactly is controlled?

Step 2 — Identify the owner

Who creates and controls the classification?

Step 3 — Define the relevant market

Where does the taxonomy have competitive significance?

Step 4 — Assess market power

Does the owner possess substantial market power or dominance?

Step 5 — Determine competitor dependence

Can rivals realistically use alternative taxonomies?

Step 6 — Identify the conduct

Is there:

• refusal;
• discrimination;
• self-preferencing;
• tying;
• manipulation;
• interoperability restriction;
• exclusion?

Step 7 — Assess effects

Does the conduct:

• foreclose rivals?
• increase entry barriers?
• reduce innovation?
• restrict consumer choice?
• distort downstream competition?

Step 8 — Consider justification

Are there legitimate:

• quality;
• safety;
• technical;
• security;
• regulatory

reasons?

Step 9 — Examine proportionality

Could the legitimate objective be achieved through a less exclusionary method?

25. Competition Effects

Strategic taxonomy ownership may produce several forms of competitive harm.

A. Entry barriers

New firms may have to obtain recognition from the incumbent.

B. Switching costs

Consumers and businesses may become dependent on one classification architecture.

C. Network effects

The more participants use the taxonomy, the more valuable it becomes.

D. Innovation suppression

New products may fail to fit established classifications.

E. Information asymmetry

The taxonomy owner possesses information competitors cannot replicate.

F. Market foreclosure

Competitors may be technically present but commercially invisible.

G. Ecosystem lock-in

Users may become dependent upon the dominant company's taxonomy across multiple products.

26. Remedies

Where an infringement is established, possible remedies could include:

Structural or access remedies

• non-discriminatory access;
• interoperability;
• licensing;
• separation of conflicting functions.

Behavioral remedies

• transparent classification criteria;
• equal-treatment obligations;
• independent review;
• audit mechanisms;
• prohibition of self-preferencing.

Governance remedies

• independent standards committees;
• competitor participation;
• procedural safeguards;
• appeal mechanisms.

Data remedies

• data portability;
• interoperability;
• access to necessary metadata;
• standardized formats.

Any remedy would have to be tailored to the established competitive harm rather than imposed merely because a taxonomy is proprietary.

27. Key Case-Law Principles

The EU courts themselves identify Bronner, Commercial Solvents, Magill, Microsoft and related authorities as part of the development of refusal-of-access jurisprudence.

28. Conceptual Model

The relationship can be represented as:

Taxonomy Ownership
↓
Control over Classification
↓
Control over Eligibility / Visibility / Interoperability
↓
Competitor Dependence
↓
Market Power
↓
Exclusionary Conduct
↓
Foreclosure / Reduced Innovation / Reduced Choice
↓
Potential Antitrust Liability

But an important qualification applies:

Taxonomy Ownership ≠ Antitrust Violation

The intervening elements—particularly market power, exclusionary conduct, competitive effects, indispensability where relevant, and lack of objective justification—remain critical.

29. Conclusion

Strategic taxonomy ownership represents an emerging competition-law problem because modern markets increasingly depend upon systems that determine how products, firms, technologies and information are categorized and made visible.

The classical competition-law cases provide the foundation:

• Magill demonstrates the competitive importance of controlled information;
• IMS Health illustrates the importance of an industry-standard information structure;
• Microsoft demonstrates the competitive significance of interoperability information;
• Bronner establishes caution before requiring access to proprietary infrastructure;
• Google Shopping demonstrates the importance of control over digital visibility and presentation;
• Google Android illustrates ecosystem leveraging;
• Android Auto shows the evolution of refusal-to-interoperate analysis in digital ecosystems;
• Commercial Solvents demonstrates the significance of upstream control over downstream competition.

The central modern question is therefore not simply “Who owns the taxonomy?” but:

“Does control over the taxonomy allow a firm with market power to determine who can participate, how competitors are classified, how they interoperate, and how consumers encounter them—and is that control being exercised in a manner that restricts effective competition?”

That question places strategic taxonomy ownership at the intersection of dominance, essential facilities, refusal to deal, interoperability, self-preferencing, standard setting, discrimination, data power, digital ecosystems and innovation competition.