The Federal Cartel Office (Bundeskartellamt) in Germany is intensifying its scrutiny of major cloud service providers, citing concerns over potential market dominance and the implications of expanding artificial intelligence capabilities.
Andreas Mundt, President of the Bundeskartellamt, acknowledged that the cloud services market is largely concentrated among three key players: Amazon Web Services, Google Cloud and Microsoft Azure. He stated the companies possess significant incentives to leverage their market power, prompting increased investigation into potential anti-competitive practices.
A central focus of the Cartel Office’s examination is the existence of so-called “lock-in effects”. These refer to the difficulties customers might face when attempting to switch cloud providers, potentially limiting choice and innovation.
Mundt expressed apprehension that the increasing power of these tech giants could be further amplified by the rapid advancement and integration of artificial intelligence. He highlighted the extensive data holdings of companies like Meta (3.2 billion users globally) and Google (YouTube and a leading search index) as factors demanding careful oversight.
The Bundeskartellamt has already initiated procedures specifically addressing the application and impact of AI technologies. Mundt emphasized that the regulation of the digital sector extends beyond purely competitive considerations, encompassing the broader issue of European digital sovereignty. He underscored the necessity of fostering a robust, independent European digital ecosystem, asserting that reliance on foreign entities for critical digital infrastructure is unsustainable. The ongoing regulatory efforts are seen as crucial for ensuring Europe’s autonomy in the digital realm.