Avis n° 23-A-08 du 29 juin 2023 portant sur le fonctionnement concurrentiel de l’informatique en nuage (« cloud »).
My perspective comes from someone studying this topic as an independent researcher, and currently writing an article based on a Teramo presentation, so I'm obviously biased.
I've read some parts of today's 200-page long Opinion and find that it is largely in line with the main conclusions of other important analyses, particularly those of Ofcom and the Dutch competition authority. Opportunistically, I would have hoped for a more detailed discussion of the application of the DMA to the cloud sector, which remains quite general, perhaps (un)surprisingly. But this could be an exciting topic for a paper to be presented at the upcoming November conference in Brussels on "DMA enforcement between opportunities and challenges" (call for papers). The analysis of the Data Act proposal has also been largely omitted because there has already been a political agreement on the text (two days ago).
The clearest added value, which needs to be evaluated in detail, seems to be the definition of the relevant market, particularly in the presence of digital ecosystems, which I'm happy to cover in a lesson next week in Augusta Treverorum. There are also rich scenarios involving specific competitive risks. It seems clear that the focus, also in view of (likely ?) enforcement actions, is on possible abuses of dominant position, but also Article 101 and other French provisions that could possibly be applicable (also by another French regulator). Regarding mergers in the cloud sector, the Authority is already pleased to receive information regarding any proposed concentration by gatekeepers in the cloud sector under Article 14 DMA. As for the emergence of generative AI, the Authority remains quite reserved, simply noting that these new technologies could potentially be changing the structure and competitive balance of cloud markets.
Newsflash: After rapidly dashing off these lines yesterday afternoon, a rather noteworthy contribution emerged from the FTC's Bureau of Competition and Office of Technology on the competition concerns raised by Generative AI, a subject that, as seen above, the French competition authority is still ruminating over. From the point of view of competition in the cloud, the contribution made at least three relevant point:
1) The Bureau refreshed our memories on the successful action to block Nvidia's acquisition of Arm (the merger would have otherwise snuffed out competition in multiple processor markets, including chips for cloud service providers=computational resources);
2) "Incumbents that control key inputs or adjacent markets, including the cloud computing market, may be able to use unfair methods of competition to entrench their current power or use that power to gain control over a new generative AI market";
3) Egress fees, which the EU is trying to regulate, could be a way by which cloud providers can lock in generative AI companies with an insatiable appetite for compute power.
