Neighborhood complexity and kernelization for nowhere dense classes of graphs

We prove that whenever $G$ is a graph from a nowhere dense graph class $\mathcal{C}$, and $A$ is a subset of vertices of $G$, then the number of subsets of $A$ that are realized as intersections of $A$ with $r$-neighborhoods of vertices of $G$ is at most $f(r,\epsilon)\cdot |A|^{1+\epsilon}$, where $r$ is any positive integer, $\epsilon$ is any positive real, and $f$ is a function that depends only on the class $\mathcal{C}$. This yields a characterization of nowhere dense classes of graphs in terms of neighborhood complexity, which answers a question posed by Reidl et al. As an algorithmic application of the above result, we show that for every fixed $r$, the parameterized Distance-$r$ Dominating Set problem admits an almost linear kernel on any nowhere dense graph class. This proves a conjecture posed by Drange et al., and shows that the limit of parameterized tractability of Distance-$r$ Dominating Set on subgraph-closed graph classes lies exactly on the boundary between nowhere denseness and somewhere denseness.