Digital Ecosystem Constitutional Order Theory

1. Introduction

Digital Ecosystem Constitutional Order Theory is a legal and economic theory that examines whether dominant digital ecosystems—such as large platform, cloud, app-store, advertising, payment, search, social-media, and AI ecosystems—have acquired forms of quasi-constitutional economic power.

Traditional constitutional law assumes that public authority is exercised principally by the State. Competition law, by contrast, generally assumes that private economic actors operate within rules established by public institutions. Digital ecosystems complicate this distinction because a sufficiently powerful platform may simultaneously:

• make rules for participation;
• determine who obtains market access;
• control technical standards and APIs;
• rank or recommend participants;
• collect and exploit data;
• impose contractual conditions;
• monitor compliance;
• investigate alleged violations;
• impose sanctions such as suspension or delisting; and
• control infrastructure essential to downstream businesses.

The theory therefore asks whether digital markets require a constitutional conception of economic power, rather than relying exclusively upon conventional notions of consumer welfare, price effects and individual abuses.

2. Meaning of “Digital Ecosystem”

A digital ecosystem is a network of interconnected products, services, technologies, users and complementary businesses controlled or coordinated through a common digital infrastructure.

Examples include:

• operating systems + app stores + payment systems;
• search engines + browsers + advertising;
• social networks + messaging + advertising;
• cloud computing + AI models + developer tools;
• e-commerce marketplaces + logistics + payments;
• smartphones + operating systems + application distribution;
• digital identity + authentication + payment infrastructure.

The defining characteristic is interdependence.

A firm may have substantial power even where it does not monopolise one narrowly defined market because it can leverage power from one layer into another.

3. Meaning of “Constitutional Order”

A constitutional order is not merely a written constitution. In broader institutional theory, it concerns the distribution and limitation of fundamental decision-making power.

A constitutional approach therefore asks:

Who makes the rules, who is subject to them, who interprets them, and who has the power to change or enforce them?

Applied to digital ecosystems, this creates a distinction between:

Traditional market power

A firm can influence:

• prices;
• output;
• contractual terms;
• supply;
• distribution.

Constitutional-type digital power

A dominant ecosystem can influence:

• who may participate;
• what conduct is permitted;
• which competitors receive visibility;
• which technologies interoperate;
• which data can be accessed;
• which applications can be distributed;
• which users can migrate;
• which businesses survive within the ecosystem.

The second category is substantially more structural.

4. Central Thesis of the Theory

The central proposition can be expressed as:

When a private digital ecosystem acquires durable control over essential economic infrastructure and the rules governing participation in that infrastructure, its power may become constitutionally significant even before conventional monopoly pricing or consumer harm becomes demonstrable.

This does not mean that every large platform becomes a government.

Rather, the argument is that certain private platforms can perform functions analogous to economic constitutions.

5. Elements of Digital Ecosystem Constitutional Order

A. Rule-Making Power

Platforms establish:

• terms of service;
• developer rules;
• ranking criteria;
• advertising policies;
• API access rules;
• content policies;
• interoperability requirements;
• payment requirements.

These rules can substantially determine market outcomes.

For example, an app-store operator may decide whether an application can reach millions of users.

Thus, contractual terms can become instruments of market governance.

B. Market-Access Power

A platform may function as a gateway.

Examples include:

• app stores;
• search engines;
• online marketplaces;
• cloud infrastructure;
• digital advertising exchanges;
• payment networks.

Where businesses cannot practically reach customers without access to the ecosystem, exclusion from the platform can have consequences resembling exclusion from a critical economic institution.

C. Ranking and Visibility Power

Digital ecosystems do not merely permit participation.

They frequently determine visibility.

Algorithms can determine:

• search ranking;
• product placement;
• recommendation;
• advertising visibility;
• app discoverability;
• news-feed exposure.

This creates a distinctive form of power:

the power to determine economic attention.

D. Data Constitutionalism

Data can become a foundational resource.

A dominant ecosystem may control:

• user behavioural data;
• transaction data;
• location information;
• search data;
• advertising data;
• interoperability information;
• developer-generated data.

Control over these resources can reinforce ecosystem dominance.

Data therefore becomes relevant not merely as a privacy issue but as a distribution-of-economic-power issue.

6. The Constitutional Separation of Digital Economic Powers

A particularly important aspect of the theory is the idea of separation of powers.

A dominant platform may simultaneously perform four functions:

This produces a potential concentration of private authority.

For example:

1. The platform creates a rule.
2. Its algorithm detects an alleged violation.
3. The platform investigates the conduct.
4. The platform determines liability.
5. The platform imposes suspension.
6. The platform may simultaneously compete with the affected business.

This is substantially different from the conventional competitive relationship between independent firms.

7. Digital Due Process

A constitutional theory consequently raises questions of procedural fairness.

Potential principles include:

Notice

Participants should know the applicable rules.

Transparency

Material changes to ranking, access or enforcement rules should not be entirely opaque.

Reasoned decisions

Major exclusions should have intelligible reasons.

Right to contest

Affected businesses should have meaningful opportunities to challenge decisions.

Proportionality

Sanctions should correspond to the seriousness of the violation.

Independent review

In sufficiently important ecosystems, disputes may require review beyond the platform itself.

These principles resemble administrative-law concepts even though the decision-maker is a private corporation.

8. Digital Economic Citizenship

The theory can also conceptualise users and businesses as economic participants rather than merely consumers or contracting parties.

A developer dependent upon an app store may possess:

• economic participation rights;
• access interests;
• interoperability interests;
• portability interests;
• non-discrimination interests.

Similarly, a seller dependent upon an online marketplace may have interests in:

• fair ranking;
• access to transaction data;
• predictable enforcement;
• transparent delisting;
• non-preferential treatment.

The concept therefore moves beyond:

“consumer versus company”

toward:

“participants within a digitally governed economic order.”

9. Network Effects and Constitutional Entrenchment

Network effects are central.

A platform becomes more valuable as:

• more users join;
• more developers participate;
• more advertisers participate;
• more data is generated;
• more complementary services are integrated.

This can create a reinforcing cycle:

Users → Data → Better service → More users → More developers → More complements → Greater ecosystem value → Higher switching costs → More users

The result can be constitutional entrenchment.

Once an ecosystem becomes deeply embedded, competitors may find it difficult to challenge the incumbent even if they possess technologically superior products.

10. Switching Costs and Exit

A constitutional order requires meaningful exit and voice.

Digital ecosystems can weaken exit through:

• data portability barriers;
• loss of social connections;
• incompatible formats;
• ecosystem-specific purchases;
• device integration;
• loyalty programs;
• contractual restrictions;
• technical incompatibility.

Consequently:

The right to leave an ecosystem becomes economically significant.

Portability and interoperability can therefore function as structural safeguards against excessive private power.

11. Interoperability as a Constitutional Principle

Interoperability enables participants to interact across ecosystem boundaries.

Examples include:

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

From a constitutional perspective, interoperability can prevent an ecosystem from becoming a closed economic territory.

It promotes:

• contestability;
• freedom of entry;
• user mobility;
• innovation;
• pluralism.

12. Ecosystem Self-Preferencing

A major constitutional problem arises where the platform operates both as:

1. market infrastructure, and
2. competitor within that infrastructure.

It may then have incentives to favour its own services.

Examples could include:

• ranking its own products more prominently;
• using platform data against rivals;
• imposing greater restrictions on competing applications;
• giving preferential technical access to its own services;
• tying ecosystem services together.

This is not simply ordinary commercial competition.

It concerns the neutrality of the market's governing infrastructure.

13. Six Major Case Laws

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

The U.S. Microsoft litigation is foundational to digital ecosystem constitutional theory.

Microsoft possessed substantial power through the Windows operating-system ecosystem and used contractual and technical strategies affecting browser distribution.

The court examined conduct involving:

• exclusionary agreements;
• browser distribution;
• technical integration;
• restrictions affecting rivals.

Constitutional significance

The case demonstrates that control over a foundational digital layer can be leveraged into adjacent markets.

It therefore provides an early example of:

infrastructure power becoming ecosystem power.

2. United States v. Google LLC — Search Distribution Case (2024)

The U.S. federal court found Google liable for maintaining monopolies in general search services and search advertising through exclusionary distribution agreements.

The litigation focused substantially upon Google's agreements concerning:

• default search placement;
• browsers;
• mobile devices;
• distribution channels.

Constitutional significance

Defaults are not merely contractual arrangements.

They can determine the architecture through which users encounter markets.

The case therefore illustrates how control over distribution architecture can reinforce ecosystem dominance.

3. Google Shopping — European Commission (2017)

The European Commission found that Google abused its dominant position by giving its comparison-shopping service more favourable positioning and display within general search results than competing comparison-shopping services.

Constitutional significance

Search ranking acts as a form of economic visibility governance.

The issue was therefore not simply price.

It concerned:

who receives access to user attention through an infrastructure controlled by a dominant firm.

This strongly supports the constitutional-order perspective.

4. Google Android — European Commission (2018)

The European Commission found Google infringed EU competition law through restrictions associated with Android, including arrangements involving:

• Google Search;
• Chrome;
• Play Store;
• device manufacturers;
• app distribution.

Constitutional significance

Android demonstrates how an operating system can become an ecosystem governance mechanism.

Control over the operating-system layer can influence:

• application distribution;
• search defaults;
• browser access;
• device manufacturers;
• competing services.

The case therefore illustrates vertical ecosystem leverage.

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

The U.S. litigation involving Apple examined Apple's App Store ecosystem, including:

• app distribution;
• payment mechanisms;
• anti-steering restrictions;
• platform commissions;
• developer access.

Although the judgment did not accept all of Epic's antitrust claims, the case is highly important theoretically.

Constitutional significance

The App Store demonstrates a particularly clear ecosystem governance structure:

Apple → iOS → App Store → Developers → Consumers

Apple establishes the rules governing access to a substantial digital distribution channel while simultaneously offering competing services.

The case therefore raises the constitutional question of whether a platform can act as both market-maker and market participant.

6. Ohio v. American Express Co. (2018)

The U.S. Supreme Court considered competition issues concerning the American Express payment platform and its two-sided market.

The Court emphasised the importance of considering both sides of the platform when analysing competitive effects.

Constitutional significance

The case demonstrates why digital ecosystem power cannot always be analysed by examining a single group of consumers.

A platform can coordinate multiple participant groups:

• consumers;
• merchants;
• advertisers;
• developers;
• service providers.

This supports the broader proposition that ecosystem governance requires multi-sided structural analysis.

7. Meta Platforms, Inc. v. Bundeskartellamt (CJEU, 2023)

The Court of Justice addressed the interaction between competition law and data-protection considerations in relation to Meta's processing of personal data.

The case concerned the relationship between:

• Facebook services;
• personal data;
• data generated through other services;
• consent;
• competition-law enforcement.

Constitutional significance

The case demonstrates that digital economic power cannot be isolated neatly into separate legal categories.

Competition, privacy and data governance can interact.

This supports a constitutional approach in which data rights and economic power are considered together.

14. Comparative Case-Law Table

15. Constitutionalization of Competition Law

Traditional competition law asks questions such as:

• Is the undertaking dominant?
• Is there exclusionary conduct?
• Are consumers harmed?
• Are prices increased?
• Is output reduced?

Digital constitutional theory adds:

• Who controls the infrastructure?
• Who establishes participation rules?
• Can participants exit?
• Is the platform structurally neutral?
• Can the platform change rules unilaterally?
• Does the platform adjudicate its own disputes?
• Can competitors access essential ecosystem inputs?
• Is algorithmic governance accountable?
• Can private economic authority become entrenched?

Thus competition law becomes partly a law of institutional design.

16. Relationship With EU Competition Law

The theory fits particularly well with the EU's broader conception of market structure.

Article 102 TFEU

Article 102 addresses abuses of dominance.

Relevant digital theories include:

• exclusionary conduct;
• refusal of access;
• tying;
• self-preferencing;
• discriminatory conditions;
• leveraging;
• exploitative conduct.

Digital Markets Act

The DMA adds an ex ante dimension.

Its gatekeeper framework recognises that certain digital platforms possess structural significance requiring obligations before traditional antitrust litigation becomes sufficient.

This is particularly compatible with constitutional-order theory because the objective is not merely to punish past misconduct but to structure the behaviour of systemically important intermediaries.

17. Germany and the Constitutional Economic Order

The German approach is especially significant because German competition law historically incorporates ideas concerning the economic constitution and preservation of competitive processes.

Section 19a of the German Competition Act is particularly important for large digital undertakings of paramount significance across markets.

The underlying concern is that a powerful ecosystem can extend its influence across multiple neighbouring markets.

This corresponds closely with constitutional-order theory:

economic power must remain sufficiently dispersed to preserve competitive freedom and institutional pluralism.

18. Digital Ecosystem Constitutional Failure

A digital constitutional order can fail when there is excessive concentration of:

1. Rule-making power

One firm controls participation rules.

2. Infrastructure power

Competitors cannot realistically bypass the ecosystem.

3. Information power

The platform possesses superior data about market participants.

4. Enforcement power

The platform can investigate and punish participants.

5. Ranking power

Algorithms determine commercial visibility.

6. Switching power

Users face substantial exit costs.

7. Capital power

The ecosystem can finance acquisitions of emerging competitors.

Together, these can produce self-reinforcing private authority.

19. The “Digital Separation of Powers” Model

A useful theoretical model is:

Legislative function

Platform creates rules.

↓

Administrative function

Algorithms implement rules.

↓

Investigative function

Platform monitors participants.

↓

Judicial function

Platform determines violations.

↓

Enforcement function

Platform suspends, delists or restricts participants.

↓

Commercial function

Platform competes with those same participants.

The fundamental concern is therefore:

Can a private company legitimately combine legislative, executive, adjudicative and commercial powers within one ecosystem?

Competition law increasingly confronts precisely this structural question.

20. Remedies Under the Theory

A constitutional approach broadens the range of possible remedies.

A. Interoperability

Require technically meaningful interoperability.

B. Data portability

Allow users and businesses to transfer relevant data.

C. Non-discrimination

Prevent discriminatory access conditions.

D. Self-preferencing restrictions

Require neutral treatment of competing services.

E. Transparency

Require disclosure of important ecosystem rules and decisions.

F. Procedural safeguards

Introduce:

• notice;
• reasons;
• appeal;
• independent review.

G. Structural separation

In extreme cases, separate infrastructure from competing commercial services.

H. Access remedies

Require access to critical interfaces, APIs or ecosystem infrastructure.

21. Digital Ecosystem Constitutionalism vs Traditional Antitrust

22. Criticisms of the Theory

The theory is not without difficulties.

First: Private platforms are not States

A company cannot automatically be treated as a constitutional government merely because it is large.

Second: Excessive regulation may discourage innovation

Digital ecosystems frequently produce efficiencies through integration.

Third: “Constitutional” is potentially too broad

If every important platform decision is described as constitutional, the concept may lose analytical precision.

Fourth: Competition law already addresses many problems

Self-preferencing, tying, exclusion and refusal of access can often be analysed through conventional antitrust doctrine.

Fifth: Institutional choices may require legislation

Courts and competition authorities may lack authority to redesign entire digital ecosystems without legislative guidance.

23. A More Precise Test

Digital ecosystem constitutional significance can be assessed through seven questions:

1. Infrastructure
Does the undertaking control an important digital infrastructure?

2. Dependency
Are users or businesses substantially dependent upon it?

3. Rule-making
Can it establish unilateral participation rules?

4. Enforcement
Can it monitor and sanction participants?

5. Conflict of interest
Does it compete with entities it regulates?

6. Exit
Can users and businesses realistically leave?

7. Contestability
Can new competitors challenge the ecosystem?

The greater the concentration across these seven dimensions, the stronger the case for constitutional-style intervention.

24. Conclusion

Digital Ecosystem Constitutional Order Theory provides a framework for understanding a transformation in economic power.

The central problem is no longer merely:

“Does a firm have monopoly power?”

It increasingly becomes:

“Who governs the digital environment in which economic activity occurs?”

A dominant digital ecosystem can exercise power over access, data, visibility, interoperability, participation and enforcement. When the same enterprise creates the rules, controls the infrastructure, monitors compliance, adjudicates disputes and competes with the businesses subject to its rules, conventional market-power analysis may not fully capture the institutional problem.

The theory consequently proposes a broader conception of competition law—one concerned not only with prices and consumer welfare but also with pluralism, contestability, procedural fairness, interoperability, economic participation and the separation of private economic powers.