Open Markets Submits Review of the Digital Markets Act - Considerations on Cloud and AI
Last week, the Open Markets Institute Europe submitted observations to the European Commission as part of its consultation on the review of the Digital Markets Act (“DMA”).
Open Markets’ submission focuses on the current enforcement gaps and the urgent need to tackle issues arising in AI and cloud. As of today, the Commission has taken no action under the DMA despite mounting evidence of limited contestability in these sectors.
In cloud, market features and tech giant’s unfair practices have fuelled the emergence of a cloud oligopoly. Cloud users end up harmed and rivals are prevented from competing fairly on the market. In AI, a small number of tech giants control the scarce and expensive inputs necessary to train large AI models and have reinforced their market power by signing partnerships with start-ups and engaging in unfair competitive practices. Other companies, notably OpenAI and Anthropic, have become so powerful that their large language models (LLMs) have almost become an important “AI infrastructure” for businesses.
The European Union must act now as these markets evolve quickly and monopolies become extremely challenging to break once established. As some aspects of the DMA fit uneasily with the nature of cloud and AI services, Open Markets Institute also argues that these services will likely require further sectoral regulations and antitrust actions.
Regarding the DMA, the submission makes the following key recommendations.
In the cloud sector:
The three main hyperscalers Amazon Web Services, Microsoft Azure and Google Cloud Platform should be designated as gatekeepers as soon as possible ;
Some DMA obligations could immediately be applied to these three players including the prohibition to use commercial data to develop their digital services and the obligation to ensure data portability ;
To tackle unfair practices effectively, other DMA obligations should be amended through a Commission investigation. These include ensuring technical interoperability, giving access on fair and non-discriminatory terms and the tying and self-preference bans.
In the AI sector:
Companies operating virtual assistants and chatbots, such as Apple, Amazon and OpenAI, should be designated as soon as possible;
The Commission must open an investigation to confirm that foundation models should be added to the list of core platform services; the Commission should then designate giants training foundation models;
Some DMA obligations could be immediately applied to gatekeepers. These include the prohibition to cross-use data to train models, the ban to force users to register or subscribe to use AI services to access another service and the obligation to ensure data portability of core platform services.
The Commission should open an investigation to update some obligations including ensuring technical interoperability of AI models and tying practices that do not require subscription or registration.