Europe’s antitrust authorities are having a very active moment, with major implications for Big Tech.
Over in the U.K., the Competition and Markets Authority today announced an investigation into the cloud sector—specifically the conduct of hyperscalers such as Microsoft and Amazon—following a recommendation by the communications regulator, Ofcom. The CMA will probe how the hyperscalers might be locking their customers into their services by implementing fees and technical barriers for those who want to switch away. Particularly as the sector becomes ever more relevant in the context of the AI explosion, this investigation could have serious ramifications if the CMA forces change.
But here in Germany, the local antitrust regulator—the Bundeskartellamt or Federal Cartel Office—is already claiming a significant victory.
You may recall that, a few months back, the EU began enforcing its new Digital Markets Act, which imposes heavy restrictions on “gatekeeper” services that businesses and consumers can’t really avoid. In the case of Google, this covers core services like Android, Maps, and YouTube—and one of the restrictions is that Google can no longer share and combine data between these services without users’ express consent.
Buoyed by a favorable ruling from the EU’s top court in a separate case involving Meta, Germany’s Bundeskartellamt has now effectively extended the scope of this restriction to cover all of Google’s other services, from Gmail and Google News to Google Assistant and Android Automotive—as well as Google’s use of data gleaned from third-party services. (Germany updated its national competition law a year or so before the EU-wide DMA was agreed upon, so the two laws are pretty aligned, but Germany and the Commission are trying to stay off each other’s turf when it comes to enforcement, which is why the commitments that the Bundeskartellamt wrung out of Google essentially cover everything not already covered by the DMA.)
Here’s agency chief Andreas Mundt, today summing up the impact of Google’s new commitments: “Without the users’ free and informed consent, the data from Google’s services and third-party services can no longer be cross-used in separate services offered by Google or even be combined.”
This regulatory offensive demonstrates how data, which used to be the exclusive domain of privacy regulators, is now something that European competition authorities can take into account when cracking down on companies. Mundt again: “Data are key for many business models used by large digital companies. The market power of large digital companies is based on the collection, processing, and combination of data. Google’s competitors do not have these data and are thus faced with serious competitive disadvantages.”
I recently wrote about how antitrust enforcement would shape the future of tech business models. That’s what we’re starting to see here because it’s a fundamental shift for companies like Google and Meta to be no longer able to mix and match user data across their portfolios as they see fit.
More news below, and be sure to read Kylie Robison and Michal Lev-Ram’s profile of OpenAI chief technology officer Mira Murati. As they write, CEO Sam Altman may be OpenAI’s public face, but Murati is in charge of key services such as ChatGPT and DALL-E and is “increasingly responsible for explaining the latest iterations to a public that can seem hyper-attuned to every breakthrough and misstep.”
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David Meyer
