Forward

Amidst global elections and evolving market dynamics, a new antitrust order looms on the horizon, reflecting growing concerns among competition authorities regarding increased market power and its potential impact for democracy and resilience, particularly in the realm of Generative Artificial Intelligence (GenAI). While new digital competition rules are underway, notably in Europe, competition authorities are actively investigating competition issues within the GenAI sector. As these investigations unfold, it appears increasingly likely that competition authorities will propose interventions of some nature—the focal point shifts from whether intervention is needed to how to intervene.

Simultaneously, leaders of competition authorities emphasise that antitrust laws should not only safeguard competition but also uphold democratic principles and economic stability. This subtle shift in perspective underscores a transition from the notion that “big is not bad. Only bad behaviours are bad” to a more cautious stance where “big is perceived as potentially detrimental”, with a renewed emphasis on safeguarding the competition process and extending its protection to encompass democracy and economic security. However, we are still in the nascent stages of this reflection, and the precise contours of this new antitrust order remain uncertain. I will actively contribute to the discussions by defining digital and competition policies in the GenAI sector and digital markets. Please feel free to send me a message so we can discuss this further.

My work

Analysis: The Commission’s strategy to regulate Big Tech: The Commission employs a stick-and-carrot approach, demonstrating its commitment to enforcing regulations while engaging in dialogue. It should balance maintaining regulatory intervention's credibility while fostering constructive dialogue through an incentive framework. The analysis

Analysis: Seizing the data and AI opportunities in Europe: Data and AI boost Europe’s economy and foster business opportunities. Thanks to Europe's digital regulations, businesses can efficiently develop and deploy digital and AI-powered products, encouraging businesses and their investors to capitalise on these frameworks. The analysis

Comment: Digital Policies Priorities Mission Letter: This comment offers recommendations for the 2024 European elections. The comment

Infographics: AI competition principles: Competition authorities should propose a voluntary code of conduct applicable to all cloud providers based on principles of access, choice, non-discrimination, and flexibility to ensure positive competition outcomes in AI. The infographics

Infographics: Competition authorities' actions on Generative AI: Since the launch of ChatGPT in November 2022, competition authorities worldwide have begun analysing GenAI. UK and Portugal issued reports; Germany reviewed the Microsoft/OpenAI partnership; other countries are still studying GenAI. The infographics

DMA tracker: I updated my DMA tracker with the opening of DMA investigations. The tracker

Event: Digital innovation: How to regulate AI and data?: I will discuss generative AI and competition with Andrea Appella (OpenAI), Yann Guthmann (French competition authority) and David Sevy (compass Lexecon) at a Concurrences’ event in London on 23 April. Send me a message to meet in person in London on 22 or 23 April. Registration

Event: How Does Competition in Generative AI Work?: I will discuss generative AI and competition with Katie Curry (RBB Economics), Thomas Höppner (Hausfeld) and Adam Cellan-Jones (Competition and Markets Authority) at a Thought Leaders’ event online on 29 April. Registration

Event: Challenges facing companies in implementing digital regulations: I will discuss DMA implementation at a conference organised by IE University in Madrid on 25 April. Send me a message to meet in person in Madrid on 24 or 25 April.

News

Generative AI

At the forefront of current discussions: Businesses frequently unveil new products, services, and partnerships. Concurrently, with an unprecedented sense of urgency, competition authorities are growing increasingly vigilant about market power and potential anticompetitive practices among a select few large tech firms.

iRobot is transitioning into reality: OpenAI has teamed up with Figure to pioneer an extraordinary robot endowed with reasoning capabilities. This ground-breaking innovation is poised to profoundly impact various sectors, spanning warehousing, manufacturing, hospitality, healthcare, and beyond, potentially influencing job landscapes. The partnership

News chips: Nvidia has unveiled new chips specifically designed for AI workloads, collaborating with Microsoft and Amazon for their integration into cloud platforms. Nvidia/Amazon partnership. Nvidia/Microsoft partnership

Cohere models on cloud platforms: Cohere models, supported by Google, are now accessible on Microsoft and Amazon platforms. Cohere on Microsoft and Amazon

Microsoft Copilot: Microsoft is broadening the reach of its AI-powered solution Copilot by making it available on its hardware. Copilot

Google is contemplating charging for AI features: Search engines rely heavily on near-zero marginal costs for queries and revenue generated from online advertising. However, answer engines incur significant costs when users use AI models to generate responses, potentially reducing clicks on links and impacting advertising revenue (a topic addressed in my previous working paper). Hence, Google is exploring implementing fees for using certain AI features. Google. Gartner study on the potential negative impact of GenAI on search traffic. My working paper on answer engines

Apple is in talks with Google and Baidu to bring AI to the iPhone: Apple is reportedly engaged in discussions with Google and Baidu to enhance the capabilities of the iPhone with their models. Although these negotiations remain undisclosed, the potential partnership between Apple and Google may prompt competition concerns, given their duopoly position within the mobile operating system sector. Apple/Google talk. Apple/Baidu talk

France is closely watching: The head of the French competition authority highlighted the risks associated with AI, especially the consolidation of market power in the hands of major online platforms, emphasising the role of antitrust laws in safeguarding both the competition process and democracy. Additionally, the authority imposed fines on Google, citing various infractions, including failing to adequately inform publishers about utilising their content in Google Bard. Speech “Artificial intelligence: making sure it’s not a walled garden”. Speech “The simple macroeconomics of transformative AI”. Google fine 

Canada is launching a consultation: The Canadian Competition Authority is the latest authority to investigate the impact of GenAI on competition. Their discussion paper offers a comprehensive overview of the current landscape. Stakeholder feedback is accepted until 4 May 2024. The consultation

The United Kingdom has voiced concerns: In an updated report, the UK competition authority meticulously scrutinises the investments and partnerships between major online platforms and GenAI firms, highlighting potential risks of market concentration and anticompetitive behaviours. The head of the authority implicitly underscores the necessity for intervention, citing apprehensions about history repeating itself with delayed interventions in digital markets, particularly as reliance grows on a select few firms (with implications for resilience).

Looking ahead, the authority remains committed to its proactive assessment, delving into market studies on cloud computing and AI (a topic addressed in my previous working paper), exploring the potential classification of digital activities under the DMCC bill to enhance competition in UK digital markets (notably, some voices in Europe advocate for a similar initiative classifying GenAI as a core platform service under the DMA), and collaborating with the data protection authority to issue a joint statement on the intricate interplay among competition, consumer protection, and data protection in foundation models (a study I plan to undertake as well). The updated report. My working paper on cloud computing. The call to classify GenAI under the DMA

Europe and the United States joint force: During the latest EU-US Joint Technology Competition Policy Dialogue, discussions revolved around competition concerns related to GenAI. The press release

G7 digital ministers: They have issued a call urging G7 competition authorities to focus on AI. The call

Digital Markets Act

One-month anniversary: Since the DMA compliance day on 7 March, the Commission has employed a stick-and-carrot approach with the gatekeepers to ensure compliance (for further insights, refer to my analysis). During this period, the Commission initiated multiple investigations amidst DMA workshops, calls for action from certain businesses, and data on market changes.

DMA workshops: The Commission organised several seminars where gatekeepers presented their compliance plans while allowing third parties to provide feedback. The primary objective of these workshops was to foster constructive dialogue among all stakeholders. Moving forward, the focus will be on leveraging the insights gleaned to enhance compliance based on the feedback received. Watch them again

Investigations opened: The Commission has initiated formal investigations and two investigatory steps against Alphabet, Amazon, Apple, and Meta. These investigations have to be concluded within a year. Additionally, the Commission will likely publish a summary of its decisions to initiate these investigations on its website (refer to my DMA tracker for updates). The investigations

Businesses are unhappy: Some coalitions express dissatisfaction with certain aspects of how certain gatekeepers comply with the DMA. I believe that many challenges can be addressed through dialogue, recognising compliance is an iterative process. I am committed to facilitating discussions and striving to achieve consensus wherever possible. Coalition for App Fairness against Google and Apple. Joint Industry Statement against Google

Data about market changes: Industry data suggests that implementing the browser choice screen has increased monthly users for competing browser engines. It is important to note that while market changes are observed, they do not necessarily indicate DMA compliance or non-compliance. The data 

Antitrust

Hot news: Competition authorities in both Europe and the United States remain actively enforcing antitrust laws within the digital sector. Meanwhile, Europe is encountering potential resistance from the Court of Justice regarding its merger control law.

Apple under scrutiny in the United States: The iPhone maker faces an antitrust lawsuit from the Department of Justice and several States. The allegations suggest that Apple has employed various anticompetitive practices to uphold its dominance in the smartphone market. Apple has denied any wrongdoing. DOJ. Apple

The Apple-Spotify saga continues in Europe: The Commission found that Apple unlawfully restricted music streaming services from guiding users to external websites for better offers by enforcing an anti-steering provision (Apple denied any wrongdoing and appealed). Although Apple has removed this provision, it has introduced a 27 per cent commission fee on transactions conducted through external links, akin to its actions in the Dutch Apple dating case. While this remedy aligns with the Commission’s order to remove the alleged anticompetitive clause, it raises questions regarding compliance with the DMA's prohibition of anti-steering rules. The DMA explicitly mandates gatekeepers to enable businesses to communicate and conclude contracts with users free of charge. The Commission is investigating Apple's compliance with the antitrust order and the DMA in light of these developments. Apple. Dutch Apple dating case

The Illumina/Grail vs Commission saga took an intriguing turn: In 2021, the Commission revised its merger control policy to review transactions falling below merger thresholds via Article 22 of the EU merger control regulation. It used it for the first time in the Illumina/Grail merger, ultimately resulting in its prohibition. Illumina contested the Commission's decision regarding using Article 22, which the Court initially upheld as legal. However, in a non-binding opinion presented before the Supreme Court, an advocate general suggested that such use may not be permissible, recommending the annulment of the Commission's decision. If the Court follows this opinion, it could potentially pave the way for Illumina to proceed with its merger with Grail in Europe. Nevertheless, Illumina has since divested Grail and the Commission has approved the divesture. However, the Commission would likely need to reassess its merger policy in the future in light of these developments. The opinion. The divestiture 

Article 22 in action: The Commission used Article 22 to scrutinise the Qualcomm/Autotalks merger. Subsequently, the parties opted to abandon the deal amidst regulatory concerns. While they did not explicitly state whether European concerns influenced their decision, the Commission's scrutiny undoubtedly factored into their considerations, given the significance of obtaining clearance in Europe. The announcement

Microsoft unbundled Teams from Office globally: Microsoft has globally unbundled Teams from Microsoft Office amidst an ongoing antitrust investigation in Europe. The Commission is currently assessing whether this unbundling adequately addresses competition concerns. Microsoft Teams unbundled

Technology units joint force: The heads of digital economy units from 20 competition authorities have issued a joint statement to enhance their capacity to address competition issues, particularly within the digital sector. The joint statement 

Vestager speech: Commissioner Vestager delivered a significant speech addressing the intersection of technology and politics that underpins the emerging antitrust landscape. The speech