Digital Ecosystem Constitutional Order And Economic Power Separation

1. Introduction

Digital Ecosystem Constitutional Order and Economic Power Separation refers to the idea that modern digital markets should not allow a single private platform, technology group, or vertically integrated ecosystem to accumulate and exercise multiple forms of economic, infrastructural, informational, and regulatory power simultaneously.

Traditional constitutionalism separates public powers—legislative, executive, and judicial—to prevent arbitrary concentration. In digital markets, a similar concern arises where a platform can simultaneously act as:

• infrastructure provider;
• marketplace operator;
• rule-maker;
• search or ranking intermediary;
• data collector;
• payment intermediary;
• advertiser;
• competitor to businesses using its infrastructure;
• access gatekeeper; and
• private adjudicator of disputes.

The concept therefore applies constitutional principles such as separation of powers, checks and balances, due process, equality, accountability, proportionality, and institutional independence to the economic organisation of digital ecosystems.

The central question is:

Can a digital ecosystem exercise rule-making, market-access, information, infrastructural, and enforcement powers without adequate institutional separation or external checks?

Competition law increasingly confronts this question through abuse-of-dominance rules, self-preferencing doctrines, essential-facility principles, interoperability remedies, data-access obligations, merger control, and structural remedies.

2. Meaning of Digital Ecosystem Constitutional Order

A digital ecosystem constitutional order is a normative and regulatory framework governing the distribution and limitation of power within interconnected digital markets.

It is not a conventional constitution in the formal state-law sense. Rather, it describes the institutional architecture through which digital economic power is constrained.

A large ecosystem may contain:

operating system → app store → search → browser → advertising → cloud → payments → identity → devices → data → content

When one undertaking controls several layers, ordinary market transactions may become dependent upon the ecosystem's internal rules.

Example

Suppose Platform X controls:

1. the operating system;
2. the app store;
3. the payment system;
4. search ranking;
5. advertising infrastructure; and
6. user identity.

It can potentially determine:

• who gets access;
• which applications are visible;
• which payment methods are permitted;
• which competitors receive data;
• how competitors are ranked;
• what commissions are charged; and
• which conduct violates its internal rules.

This resembles a private regulatory state.

3. Economic Power Separation

Economic power separation means preventing excessive concentration of different forms of market power in one entity or ecosystem.

Traditional competition law primarily asks:

Is competition being harmed?

The constitutional-order perspective asks a broader question:

Who possesses the power to determine the conditions under which others may participate in the digital economy?

Several forms of power may need to be separated.

The danger is greatest where all of these powers reinforce each other.

4. Constitutional Principles Applied to Digital Markets

A. Separation of powers

A platform should not simultaneously have unrestricted authority to:

• make marketplace rules;
• interpret those rules;
• investigate alleged violations;
• impose penalties; and
• determine appeals.

This resembles the constitutional concern with combining legislative, executive, and judicial authority.

Competition regulation can respond through:

• independent appeal mechanisms;
• procedural transparency;
• non-discrimination requirements;
• independent auditing;
• regulatory supervision; and
• limits on unilateral platform discretion.

B. Checks and balances

Digital ecosystems require countervailing mechanisms.

Potential checks include:

• competition authorities;
• sector regulators;
• courts;
• independent auditors;
• interoperability;
• data portability;
• multi-homing;
• switching rights;
• transparent ranking rules;
• independent dispute resolution.

The objective is not necessarily to eliminate platform power but to prevent unchecked power.

5. Platform Rule-Making as Private Legislation

Large platforms frequently establish rules that govern millions of businesses and consumers.

For example, an app store may determine:

• commission rates;
• payment requirements;
• content rules;
• developer eligibility;
• ranking criteria;
• advertising conditions.

These rules may resemble legislation because they establish general conditions applicable to a large economic community.

The constitutional concern arises when the platform is also a competitor of the firms subject to its rules.

Competition-law issue

A vertically integrated platform may use its rule-making authority to:

• favour its own products;
• disadvantage rival products;
• impose discriminatory terms;
• restrict alternative payment systems;
• prevent interoperability; or
• obtain commercially sensitive information.

6. Economic Due Process

Digital ecosystem constitutionalism also introduces the idea of economic due process.

A business dependent on a platform may face:

• sudden suspension;
• algorithmic demotion;
• delisting;
• loss of advertising access;
• termination of APIs;
• withdrawal of interoperability;
• loss of access to customer data.

Where the platform is economically indispensable, these decisions can have effects comparable to exclusion from an important market infrastructure.

A constitutional approach therefore favours:

1. notice;
2. reasons;
3. consistent rules;
4. opportunity to respond;
5. independent review;
6. proportional sanctions.

These safeguards can coexist with competition law without turning every platform decision into a constitutional-law dispute.

7. Data Power and Constitutional Separation

Data creates a particularly important form of ecosystem power.

A platform may simultaneously possess:

• consumer data;
• seller data;
• search data;
• transaction data;
• advertising data;
• behavioural data;
• location information; and
• data generated through competing businesses.

The platform can potentially use information obtained from dependent businesses to compete against them.

This produces a data-power asymmetry.

Example

A marketplace observes that an independent seller's product is becoming highly successful. The platform can potentially:

1. identify the successful product;
2. analyse its sales;
3. observe customer demand;
4. introduce a competing private-label product;
5. promote its own product through ranking mechanisms.

The issue is therefore not merely possession of data, but combination of information power with distribution power and competitive power.

8. Self-Preferencing as a Separation-of-Powers Problem

Self-preferencing is particularly significant.

A platform may act as:

market infrastructure + marketplace regulator + competitor

It may then rank its own services more favourably than rival services.

The constitutional-order approach views this as a structural conflict of interest.

The same entity controls:

• the market rules;
• the ranking mechanism;
• the data;
• the infrastructure; and
• the competing product.

This creates a situation analogous to a referee competing in the match while also controlling the rules.

9. Interoperability as a Constitutional Check

Interoperability can function as a structural check on ecosystem power.

If competing services can interoperate, users and businesses are less dependent upon one ecosystem.

Examples include:

• messaging interoperability;
• payment interoperability;
• API access;
• operating-system interoperability;
• data portability;
• identity interoperability.

Interoperability therefore reduces the ability of an ecosystem to convert technical control into permanent economic dependency.

10. Data Portability and Exit Rights

Data portability similarly supports economic power separation.

Without portability:

data → user history → network effects → switching costs → retention → greater ecosystem power

With meaningful portability:

data → transferable information → lower switching costs → greater contestability

Portability therefore acts as an exit mechanism.

A constitutional economic order requires not merely freedom to enter a market but, where appropriate, meaningful ability to leave an ecosystem.

11. Six Major Case Laws

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

This is one of the foundational cases for understanding digital ecosystem power.

Microsoft controlled the Windows operating-system platform and used that position in relation to the browser market. The case concerned exclusionary conduct involving Internet Explorer and competing browser technologies.

The court examined Microsoft's use of its operating-system dominance to disadvantage competition.

Constitutional-order significance

The case demonstrates the danger of combining:

infrastructure control + distribution control + competitive activity

The operating system functioned as a critical platform through which Microsoft could influence adjacent markets.

The case therefore provides an important foundation for modern discussions about ecosystem leverage and economic power separation.

2. Google Search (Shopping) — European Commission / General Court, 2021

The Google Shopping litigation concerned Google's treatment of its comparison-shopping service in search results.

The European Commission found that Google had abused its dominant position by systematically giving prominent placement to its own comparison-shopping service while demoting competing comparison-shopping services.

The General Court substantially upheld the Commission's decision in 2021.

Constitutional-order significance

This case illustrates the problem of a company simultaneously exercising:

• search infrastructure power;
• ranking power;
• data power; and
• competitive power.

The platform was not merely participating in the market; it controlled an important mechanism through which competitors reached consumers.

This makes ranking neutrality and institutional separation central issues in digital ecosystems.

3. Google Android — European Commission / General Court

The Android proceedings concerned Google's contractual practices relating to the Android mobile ecosystem, including restrictions associated with search, app distribution and device manufacturers.

The General Court substantially upheld the Commission's findings in 2022, while modifying the amount of the fine.

Constitutional-order significance

Android demonstrates how ecosystem power can arise through the combination of:

operating system + app distribution + search + contractual restrictions.

The significance goes beyond one individual contract. Control over an ecosystem layer can allow a firm to influence adjacent markets.

The case therefore supports the principle that economic power should not be assessed solely at the level of an individual product.

4. Epic Games, Inc. v. Apple Inc. (2021)

The litigation concerned Apple's App Store rules and restrictions concerning alternative payment mechanisms.

The case examined Apple's control over app distribution and payment arrangements within the iOS ecosystem.

Although the court did not accept all of Epic's antitrust claims, it issued important findings concerning Apple's anti-steering restrictions.

Constitutional-order significance

The case is highly relevant to economic power separation because Apple simultaneously controls:

• the operating system;
• app distribution;
• payment architecture; and
• contractual rules governing developers.

The controversy demonstrates why a platform can become a private rule-maker for an entire digital economic environment.

5. Epic Games, Inc. v. Google LLC (2023)

The Epic v. Google litigation concerned Google's Android app-distribution and billing ecosystem.

A jury found Google liable on Epic's antitrust claims concerning its app-store practices.

Constitutional-order significance

The case illustrates the relationship between:

• platform access;
• payment systems;
• contractual restrictions;
• developer dependency; and
• network effects.

The ecosystem can create a situation in which the platform's control over one layer—app distribution—strengthens its power over another layer, such as payments.

This is a classic example of cross-layer ecosystem power.

6. United States v. Apple Inc. (2024)

The U.S. Department of Justice's antitrust action against Apple challenged various practices concerning the iPhone ecosystem.

The government alleged that Apple used restrictions involving interoperability, app distribution, messaging, cloud gaming, payments and other technologies to maintain its position.

Constitutional-order significance

The case is especially relevant to the concept of economic power separation because the alleged conduct concerns the interaction of several ecosystem layers.

The underlying theory is that a firm may use control over one layer of a technological ecosystem to protect power in another.

The case consequently illustrates a transition from analysing single-market dominance toward analysing ecosystem architecture and cumulative control.

12. Comparative Case-Law Matrix

13. From Market Power to Institutional Power

Traditional competition law commonly focuses on:

market share → dominance → exclusionary conduct → competitive harm

Digital constitutional analysis adds another dimension:

institutional position → dependency → rule-making authority → conflicts of interest → ecosystem entrenchment

This is important because a platform with only moderate market share in one individual market may nevertheless possess substantial ecosystem power.

For example:

Cloud + AI + operating system + data + advertising + payments

may generate strategic power that cannot be captured by examining each market in isolation.

14. Separation of Competitive and Regulatory Functions

One of the strongest versions of the doctrine would require separation between:

Platform-as-marketplace

The platform provides infrastructure and facilitates transactions.

Platform-as-competitor

The platform sells products competing with ecosystem participants.

Platform-as-regulator

The platform establishes rules governing those participants.

Platform-as-enforcer

The platform investigates and penalises violations.

The greatest structural risk occurs when all four functions are concentrated in one entity.

15. Possible Regulatory Remedies

A. Behavioural remedies

Authorities can require:

• non-discriminatory access;
• transparent ranking;
• prohibition of self-preferencing;
• fair contractual terms;
• restrictions on data use;
• interoperability.

B. Procedural remedies

Platforms may be required to provide:

• notice;
• explanations;
• appeals;
• independent review;
• auditability.

C. Structural remedies

More intrusive measures may include:

• separation of business units;
• functional separation;
• data silos;
• restrictions on vertical integration;
• divestiture.

Structural remedies are particularly relevant where behavioural remedies cannot resolve an inherent conflict of interest.

16. Economic Power Separation and Merger Control

Digital mergers can intensify ecosystem concentration even where the acquired company has relatively little revenue.

A transaction involving:

users + data + technology + distribution + interoperability

may strengthen an ecosystem's constitutional position.

Consequently, merger review increasingly needs to examine:

• nascent competition;
• data accumulation;
• interoperability;
• ecosystem expansion;
• foreclosure;
• network effects;
• control of technical standards.

The question becomes not merely:

"Will prices increase?"

but also:

"Will the transaction make one ecosystem structurally unavoidable?"

17. The German/EU Constitutional Dimension

The concept has particular relevance to the European economic constitutional tradition.

The EU competition framework seeks to preserve open and competitive markets, while German ordoliberal thought places particular emphasis on preventing excessive private economic power from undermining the competitive order.

Digital ecosystems intensify this issue because private firms can create quasi-regulatory environments without possessing formal governmental authority.

The resulting principle can be expressed as:

Private economic power should remain contestable, accountable and subject to institutional checks.

This does not mean that every dominant platform must be broken up.

Rather, the regulatory objective is to prevent economic power from becoming self-reinforcing political, informational and infrastructural power.

18. Digital Constitutional Order vs Traditional Antitrust

19. Core Risks

The principal risks are:

1. Private regulatory monopoly

One ecosystem establishes the rules for an entire digital market.

2. Conflict of interest

The platform regulates competitors while competing against them.

3. Information asymmetry

The platform possesses information unavailable to dependent businesses.

4. Dependency

Businesses cannot realistically operate without access to the ecosystem.

5. Algorithmic opacity

Market participants cannot determine why access, ranking or visibility changed.

6. Retaliatory power

A platform can impose commercial consequences on businesses challenging its rules.

7. Ecosystem entrenchment

Network effects make accumulated power increasingly difficult to challenge.

20. A Constitutional Model for Digital Ecosystems

A useful model is:

Infrastructure Power
↓
Access Power
↓
Data Power
↓
Ranking Power
↓
Rule-Making Power
↓
Enforcement Power
↓
Competitive Power
↓
Ecosystem Entrenchment

The constitutional objective is to introduce checks between these layers.

For example:

Interoperability → reduces infrastructure dependency

Data portability → reduces information lock-in

Non-discrimination → limits ranking/access power

Independent appeals → limits enforcement power

Competition enforcement → limits ecosystem leverage

Structural separation → addresses persistent conflicts of interest

21. Conclusion

Digital Ecosystem Constitutional Order and Economic Power Separation represents a broader conception of competition law in which the central concern is not merely whether a firm has monopoly power, but how different forms of power are combined and exercised.

The modern digital platform can potentially be:

infrastructure owner + marketplace operator + rule-maker + data controller + ranking authority + competitor + enforcement authority.

That combination creates a structural conflict that traditional market-share analysis may inadequately capture.

The Microsoft, Google Shopping, Google Android, Epic–Apple, Epic–Google and U.S. Apple proceedings collectively demonstrate why digital competition law increasingly focuses on ecosystem leverage, self-preferencing, access control, interoperability, payments, data, and cross-market entrenchment.

The ultimate principle of a digital economic constitutional order is therefore:

No private digital ecosystem should possess such concentrated and mutually reinforcing economic powers that it can simultaneously determine the rules of competition, control access to the market, exploit informational advantages, compete against dependent businesses, and enforce its own rules without effective external checks.