Digital Public Goods Infrastructure and Competition Tensions

Introduction

Digital Public Goods (DPGs) are digital resources—such as open-source software, open standards, interoperable digital infrastructure, public datasets, digital identity systems, payment rails, registries, and reusable technology platforms—designed to provide broad social or economic benefits. Examples may include open-source operating systems, public digital identity infrastructure, open APIs, open data repositories, and interoperable payment systems.

DPG infrastructure can increase competition because it lowers entry barriers, reduces duplication, promotes interoperability, and gives smaller firms access to common technological foundations. At the same time, however, it can create new competition-law tensions when governments, dominant firms, consortia, or infrastructure operators control essential interfaces, standards, datasets, certification mechanisms, or access conditions.

The central competition question is therefore:

How can society preserve the openness and public character of digital infrastructure without allowing the infrastructure itself to become a mechanism for exclusion, discrimination, or market foreclosure?

1. Meaning of Digital Public Goods Infrastructure

DPG infrastructure generally has several characteristics:

1. Open or broadly accessible technology
2. Interoperability
3. Reusability
4. Public-interest orientation
5. Low or zero marginal access cost
6. Transparent technical standards
7. Potentially open-source licensing
8. Ability to support multiple downstream businesses

A DPG can therefore function as a common digital input.

For example:

Public digital infrastructure → APIs/data/identity/payment rails → private applications → consumers and businesses

If access is genuinely neutral, the infrastructure can promote competition.

If the infrastructure operator favours particular downstream participants, however, it can become a bottleneck.

2. Why DPG Infrastructure Creates Competition Tensions

A. Public infrastructure can become an essential input

A digital public infrastructure may become so widely adopted that businesses cannot realistically compete without accessing it.

Examples include:

• digital identity infrastructure;
• payment infrastructure;
• public data;
• interoperability protocols;
• government APIs;
• authentication services;
• public cloud-like infrastructure;
• public registries.

The competition problem resembles the essential-facilities doctrine.

If access is denied or technically restricted, downstream competition may suffer.

3. Open Infrastructure vs Controlled Infrastructure

The competitive effects differ depending on governance.

Open model

Infrastructure → equal access → multiple competitors → innovation

Controlled model

Infrastructure → gatekeeper → selective access → favoured firms → foreclosure

Thus, the legal issue is not simply whether infrastructure is publicly funded.

The relevant questions are:

• Who controls access?
• Are access conditions discriminatory?
• Are technical standards neutral?
• Can competitors interoperate?
• Is pricing transparent?
• Can the operator favour affiliated businesses?
• Can access be withdrawn arbitrarily?

4. DPGs and Article 102 / Abuse of Dominance

Where an infrastructure operator possesses substantial market power, competition law may address:

• refusal to supply;
• discriminatory access;
• tying;
• self-preferencing;
• margin squeeze;
• exclusionary technical design;
• discriminatory interoperability;
• exploitative licensing;
• data access restrictions.

The classic principle is that control over an indispensable input can generate special competition-law responsibilities.

5. DPG Infrastructure and Essential Facilities

The essential-facilities concept becomes particularly interesting in digital markets because infrastructure can be replicated technically but still become commercially indispensable through network effects.

For example:

Open identity infrastructure → widespread adoption → applications depend upon it → alternative identity infrastructure becomes commercially impractical.

The question becomes whether the infrastructure has crossed the line from being merely useful to being economically indispensable.

6. Six Important Case Laws

1. Commercial Solvents Corp. v Commission

The European Court of Justice established an important principle concerning refusal to supply an input to downstream competitors.

A dominant undertaking controlling an important input could not simply withdraw supplies where that conduct threatened to eliminate competition in a downstream market.

Relevance to DPGs

A digital infrastructure operator controlling an indispensable technological input could face analogous concerns where it:

• restricts access;
• excludes downstream competitors;
• supplies affiliated businesses preferentially; or
• deliberately degrades interoperability.

The case provides an early foundation for analysing infrastructure bottlenecks and downstream foreclosure.

2. United Brands v Commission

The case concerned the conduct of a dominant undertaking and established important principles concerning dominance and abusive behaviour.

Relevance to DPG infrastructure

A digital infrastructure provider may acquire substantial bargaining power where users or businesses have few alternatives.

Competition authorities may therefore examine:

• switching possibilities;
• alternative infrastructure;
• dependence;
• access conditions;
• discriminatory treatment.

The case is useful for understanding how market power can translate into obligations concerning commercial conduct.

3. Bronner v Mediaprint

The Court of Justice adopted a restrictive approach to refusal-to-supply claims.

The Court emphasised that access to another undertaking's infrastructure requires particularly strong justification before competition law imposes a compulsory-access obligation.

DPG relevance

This is especially important because not every public or widely used digital infrastructure automatically constitutes an essential facility.

Authorities must consider factors such as:

• indispensability;
• availability of alternatives;
• feasibility of duplication;
• elimination of effective competition.

Thus, DPG status alone does not necessarily create a duty to provide unrestricted access.

4. IMS Health v Commission

The case concerned access to a commercially controlled information structure and intellectual-property-related infrastructure.

The Court recognised circumstances in which refusal to license could constitute abusive conduct.

DPG relevance

The case is highly relevant where DPG infrastructure contains:

• proprietary interfaces;
• datasets;
• technical specifications;
• interoperability protocols;
• software components.

It demonstrates the tension between exclusive rights and competition.

The infrastructure owner may have legitimate intellectual-property interests, but those rights cannot necessarily be used to eliminate downstream competition.

5. Microsoft Corp. v Commission

Microsoft is one of the most important precedents for digital infrastructure and interoperability.

The European Commission found problems concerning Microsoft's refusal to provide interoperability information and its tying practices.

DPG relevance

The case demonstrates how technological architecture itself can become an instrument of market foreclosure.

Competition concerns can arise where an infrastructure operator:

• withholds interoperability information;
• makes competing products technically incompatible;
• uses a dominant platform to advantage complementary products;
• controls interfaces needed by rivals.

For DPGs, interoperability is therefore not merely a technical objective—it can be a competition-law safeguard.

6. Google Shopping

The Google Shopping case involved Google's treatment of its comparison-shopping service within its general search results.

The General Court upheld the Commission's finding of abusive conduct, focusing on the manner in which Google's dominant search infrastructure advantaged its own comparison-shopping service.

DPG relevance

The case is particularly useful for understanding self-preferencing and infrastructure neutrality.

Suppose a publicly supported digital infrastructure permits private applications to operate on top of it while its operator simultaneously owns a downstream commercial service.

A competition problem could arise if the operator:

controls the infrastructure + controls access + favours its own downstream service.

This creates a structural conflict between infrastructure governance and commercial competition.

7. Additional Relevant Case Laws

7. Magill

The Magill litigation established an important framework concerning exceptional circumstances in which refusal to license intellectual property could become abusive.

DPG connection

It is relevant where open digital infrastructure depends upon:

• copyrighted databases;
• software licences;
• proprietary technical information;
• reusable digital resources.

The case helps balance innovation incentives against downstream competition.

8. Slovak Telekom v Commission

The case involved access to telecommunications infrastructure and exclusionary conduct.

DPG connection

It demonstrates how vertically integrated infrastructure operators can potentially use control over upstream infrastructure to disadvantage downstream competitors.

This is closely analogous to digital infrastructure where:

Infrastructure layer + application layer + commercial affiliation

are controlled by the same entity.

9. Deutsche Telekom v Commission

The case is particularly important for the margin-squeeze concept.

A vertically integrated infrastructure operator may theoretically make infrastructure available to rivals while setting wholesale and retail conditions in a way that makes effective competition commercially impossible.

DPG connection

Even when DPG infrastructure is formally open, competition can still be harmed through:

• excessive access fees;
• hidden technical costs;
• compliance burdens;
• discriminatory service levels;
• expensive certification;
• differential API limits.

Thus:

Formal openness does not necessarily equal effective openness.

10. Bronner and the Digital Essential-Facility Problem

Bronner remains particularly important because it prevents competition law from automatically converting every important infrastructure into a mandatory-access facility.

For DPG governance, this creates a delicate balance:

Too little access → foreclosure

but

Too much compulsory access → reduced incentives to invest and innovate.

Competition law therefore needs to distinguish between genuinely indispensable infrastructure and merely advantageous infrastructure.

8. Public Procurement and DPG Competition

Government procurement can also create competition concerns.

A government may commission digital infrastructure from a particular supplier.

Potential problems include:

• proprietary technical specifications;
• vendor lock-in;
• closed APIs;
• exclusive maintenance rights;
• long-term contracts;
• restrictive certification;
• data portability restrictions.

A system initially designed as a public digital good can therefore become a private technological dependency.

9. Vendor Lock-In

One of the greatest competition risks is vendor lock-in.

Consider:

Government funds digital infrastructure → supplier builds proprietary architecture → government agencies depend upon supplier → switching becomes prohibitively expensive → supplier obtains durable market power.

The infrastructure may technically belong to the public sector, while practical control remains with the supplier.

Competition policy should therefore examine:

• portability;
• interoperability;
• open standards;
• source-code access where appropriate;
• transition rights;
• migration costs;
• API documentation.

10. Network Effects

DPGs can produce strong network effects.

The more users that adopt an infrastructure, the more valuable it becomes.

For example:

More users → more developers → more applications → more users

This can generate a positive social feedback loop.

But the same mechanism can produce winner-takes-most dynamics.

Once one infrastructure becomes dominant, competing infrastructures may struggle to attract users.

Consequently, a DPG intended to democratise digital markets may unintentionally create infrastructure concentration.

11. Data as a Digital Public Good

Data is another major competition issue.

Public data can stimulate:

• AI development;
• research;
• fintech;
• transportation innovation;
• healthcare applications;
• environmental services.

But exclusive control over datasets may allow incumbents to obtain informational advantages.

Competition questions include:

• Who can access the data?
• Is access provided equally?
• Are APIs interoperable?
• Can incumbents combine public and private data?
• Are smaller firms charged more?
• Can data be reused commercially?

12. DPGs and AI Competition

DPG infrastructure becomes especially important in AI.

Publicly available:

• datasets;
• open-source models;
• model weights;
• evaluation tools;
• computing resources;
• safety benchmarks;
• scientific repositories

can reduce barriers to AI entry.

However, concentration may arise if one company controls:

Compute + data + model + API + distribution

This can turn an ostensibly open ecosystem into a vertically integrated competitive bottleneck.

13. Open Source Does Not Automatically Eliminate Competition Problems

Open-source software can increase competition, but open-source ecosystems may themselves become concentrated.

For example:

Open code → few major maintainers → control over releases → control over standards → ecosystem dependence

Competition concerns can therefore arise around:

• governance;
• repository control;
• licensing changes;
• certification;
• compatibility;
• forks;
• developer access.

The relevant issue is not merely whether source code is available.

It is who controls the ecosystem surrounding the code.

14. Standard-Setting and DPGs

Digital public infrastructure frequently depends upon standards.

Standards can promote interoperability, but standard-setting bodies can also become competitive bottlenecks.

Possible problems include:

• exclusion of competing technologies;
• discriminatory certification;
• closed technical committees;
• excessive licensing requirements;
• manipulation of standards to favour incumbents.

Competition authorities may therefore need to distinguish:

legitimate standardisation

from

strategic standardisation designed to exclude competitors.

15. Self-Preferencing

Suppose the operator of a public digital platform also owns a private commercial application.

It could potentially manipulate:

• search rankings;
• API access;
• authentication;
• verification;
• data availability;
• transaction priority;
• technical compatibility.

This creates a self-preferencing risk.

The Google Shopping precedent illustrates why infrastructure neutrality can become an important competition concern.

16. DPGs and Interoperability

Interoperability is arguably the central competition safeguard for DPG ecosystems.

An interoperable system allows users to move between providers without losing:

• identity;
• data;
• transaction history;
• credentials;
• applications;
• functionality.

This reduces switching costs.

Therefore:

Interoperability converts infrastructure from a gatekeeping mechanism into a competitive platform.

17. Governance Capture

Another important risk is governance capture.

A DPG may formally belong to the public or open-source ecosystem while powerful private firms exercise disproportionate influence over:

• technical standards;
• governance boards;
• development priorities;
• access rules;
• certification;
• funding.

This can create a form of private regulatory power.

Competition law may therefore need to look beyond formal ownership and examine actual control.

18. Competition Between Public and Private Infrastructure

DPGs can also create concerns about competitive neutrality.

Suppose a government-operated digital infrastructure competes directly with private providers.

Questions arise concerning:

• subsidies;
• preferential regulation;
• access to government data;
• tax treatment;
• procurement preferences;
• cross-subsidisation.

The principle of competitive neutrality seeks to ensure that public ownership does not automatically confer unjustified competitive advantages.

19. Remedies

Competition authorities can use several remedies where DPG infrastructure produces exclusionary effects.

Structural remedies

• separation of infrastructure and downstream businesses;
• divestiture;
• independent governance.

Behavioural remedies

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

Governance remedies

• independent oversight;
• stakeholder representation;
• transparent standards;
• audit mechanisms.

Technical remedies

• open APIs;
• open standards;
• interoperable protocols;
• portability;
• documented interfaces.

20. Competition-Law Framework

The principal legal questions can be organised as follows:

21. Core Competition Tension

The fundamental tension can be represented as:

Public Digital Infrastructure
↓
Open Access + Interoperability
↓
Lower Entry Barriers
↓
More Competitors

But:

Public Digital Infrastructure
↓
Network Effects + Centralisation
↓
Infrastructure Dependence
↓
Gatekeeper Power
↓
Potential Foreclosure

Thus, DPGs are not inherently pro-competitive or anti-competitive.

Their effects depend heavily upon architecture, governance, access rules, interoperability and market structure.

Conclusion

Digital Public Goods infrastructure can become an important pro-competitive foundation for the digital economy by lowering entry barriers, facilitating interoperability, reducing duplication and allowing smaller firms to build upon shared technological resources.

However, the same infrastructure can become a competition bottleneck where control over identity, data, APIs, standards, payments, authentication or other essential digital inputs becomes concentrated.

The major case-law principles from Commercial Solvents, United Brands, Bronner, IMS Health, Microsoft, Google Shopping, Magill, Slovak Telekom and Deutsche Telekom collectively demonstrate the major legal themes: refusal to supply, indispensability, interoperability, vertical foreclosure, licensing, self-preferencing and margin squeeze.