Relatively spared by the European Digital Markets Act, Microsoft will not escape reinforced supervision in Germany. Monday September 30, the Bundeskartellamt, the federal office for the fight against cartels, in fact designated the Redmond giant as “a company of major importance in the market, significantly affecting competition”.
This designation was introduced by a law passed in 2021, giving more power to German competition authorities. These can notably intervene earlier in the event of fears of anti-competitive practices, even if a dominant position is not yet proven. Apple, Amazon, Alphabet and Meta are already affected by this surveillance.
Wider than DMA
“Microsoft’s many products are omnipresent in businesses, administrations and private homes, justifies Andreas Mundt, the president of the Bundeskartellamt. The Microsoft ecosystem today is stronger and more closely interconnected than ever. Its entire business is now dominated by the growing use of the cloud and artificial intelligence, key technologies in which it has consolidated its position of strength by developing its own products and establishing partnerships.”
This designation applies to all of Microsoft’s activities. A major difference with the European DMA, which aims to strengthen competition in digital technology. This only concerns the “essential services” giants of the sector. For the group led by Satya Nadella, only two activities are therefore subject to the legislation: Windows and LinkedIn. “Based on our decision, we can put an end to anti-competitive practices that are not covered by the DMA,” underlines Andreas Mundt.
Artificial intelligence and cloud
The Bundeskartellamt could particularly look into the artificial intelligence market, in which Microsoft plays a central role due to its partnership with OpenAI, of which it has become the largest shareholder. Its Azure cloud platform is in fact the exclusive distributor of the ChatGPT designer’s models, giving it a crucial competitive advantage over Amazon Web Services and Google Cloud.
This situation could be all the more problematic as Microsoft is also accused by its rivals of abusing its dominant position in the cloud. They criticize it in particular for imposing different pricing policies and technical restrictions on companies that do not deploy its Office suite or its Windows Server system on Azure. Google has also just filed a complaint with Brussels.
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