Description: the emergence of digital ecosystems has spawned the rise of the ecosystem theory of harm – which posits that mergers or conduct within digital ecosystems can result in anti-competitive outcomes through entrenchment, user lock-in, and foreclosure, even when traditional markers of market power are not apparent. However, there are several shortcomings of this theory. Firstly, critics argue there is no meaningful distinguishing characteristic in the ecosystem theory of harm that separates it from existing competition principles used to govern markets. Secondly, scholars argue that current articulations of theory have ambiguous implications for antitrust enforcement. Further, ecosystems benefit both businesses and consumers in digital markets. Given these gaps, this paper questions whether a so-called digital ecosystem merits a new theory of harm beyond the existing frames of competition analysis.
Attribution: Meghna Bal and Shweta Venkatesan. A Critical Assessment of the Ecosystem Theory of Harm. May 2026, Esya Centre