Anti-competitive practices by cloud computing providers should be contained through EU tech rules: study

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The draft EU rules to curb the power of Amazon, Apple, Alphabet unit Google and Facebook should also target cloud computing service providers because of possible anti-competitive practices, according to a study on Tuesday. The report comes amid concerns that some EU lawmakers reviewing the Digital Markets Act (DMA) proposed by EU antitrust leader Margrethe Vestager might be lenient with cloud computing companies.

Amazon Web Services was the leading provider in the second quarter, followed by Microsoft Azure and Google Cloud, according to the market research company Statista. Others are IBM Cloud, Alibaba Cloud, Salesforce, and Oracle.

Frederic Jenny, Chairman of the Competition Committee of the Organization for Economic Cooperation and Development, carried out the study in his personal capacity for the trade association Cloud Infrastructure Services Providers in Europe (CISPE).

The new EU rules should also cover software licensing, the report said, with respondents citing unfair conditions imposed by some of the major software companies for accessing their cloud infrastructure.

“While the DMA says that the cloud infrastructure can fall within the scope of the DMA, it is not obvious that all providers are covered,” Jenny said in an interview with Reuters.

“For example, Google Cloud doesn’t seem to be considered a gatekeeper or IBM Cloud or Salesforce under the DMA.”

Potential anti-competitive practices by some companies could include unfair pricing techniques or efforts to make it technically difficult for users to switch to a competitor, he said.

Jenny said the study interviewed about 25 companies that use cloud computing services. Some of them cited issues like unfair licensing terms that force customers to pay again to use software they already own when they switch to a competitor.

Respondents were also concerned that providers bundle software products with their cloud infrastructure in order to make competing products either less attractive or more expensive.

Google, Oracle and SAP declined to comment. Microsoft and Amazon did not immediately respond to requests for comments.

The EU legislator must work out the draft DMA with EU countries before it possibly comes into force in 2023.

© Thomson Reuters 2021

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