The Coalition for Open Digital Ecosystems (CODE), a collaborative industry initiative launched in late 2023 by tech giants like Meta, Google and Qualcomm, held its first public event in Brussels advocating for open digital ecosystems to stimulate growth, foster innovation, and empower consumers, particularly within the challenging global context of the EU’s economy. The event hosted a high-level panel discussion with representatives from Meta, BEUC, the European Parliament and Copenhagen Business School.
Qualcomm CEO Cristiano Amon gave an interview to Euractiv where he emphasised CODE’s three key elements of openness – seamless connectivity and interoperability, consumer choice, an an environment of open access. These elements aim to enhance user experience, maintain data access, and provide fair access to digital tools for developers, particularly smaller companies and startups. Amon highlighted the importance of interoperability and fair access for developers, especially as platforms evolve and become more relevant for various devices, including cars. He also stressed the need to provide fair access for smaller companies with new ideas to participate and reach customers in a competitive environment.
He said that Qualcomm is focused on developing computing engines, such as the Neural Processing Unit (NPU), which is designed to run all the time and handle multiple models. This development aims to add computing capability to various devices while addressing the challenge of integrating this new engine into devices without compromising battery life. Amon also expressed a positive view of the EU’s Digital Markets Act (DMA), applauding the European regulatory leadership for their focus on the importance of open and interoperable platforms.
Why does it matter?
The panel discussion envisioned a positive scenario for the European digital agenda, highlighting the importance of openness, interoperability, and collaboration for consumers, businesses, and innovation. CODE’s emergence as a new stakeholder in the Brussels digital, tech, and competition policy space highlights the growing recognition of the importance of open digital ecosystems in fostering growth, innovation, and consumer empowerment within the EU’s digital landscape.
A US lobby group representing tech giants Google, Amazon, and Apple has urged India to reconsider its proposed competition law, similar to the EU’s Digital Markets Act (DMA). The group argues that the new regulations, which aim to prevent the misuse of non-public data and preferential treatment of partners, could increase user costs and discourage investment in the country. The draft ‘Digital Competition Bill’ targets large firms with significant global turnover and local user bases, aiming to curb monopolistic practices and promote fair competition.
India’s Corporate Affairs Ministry is working on the bill, which proposes strict penalties for violations, including fines of up to 10% of a company’s annual global turnover. The proposed law addresses concerns about the growing market power of a few dominant digital companies in India. However, the US-India Business Council (USIBC) warns that the legislation’s broad scope could lead to reduced investments, higher digital service prices, and a narrower range of consumer offerings.
Why does it matter?
Despite opposition from major US tech firms, a coalition of 40 Indian startups supports the new law, arguing it will help level the playing field and combat monopolistic practices. The Indian government is reviewing the proposal’s feedback and will seek parliamentary approval in the coming months, with or without modifications.
Lobbying groups representing airlines, hotels, and retailers in Europe are urging the EU tech regulators to ensure that Google considers their views, not just those of large intermediaries, when implementing changes to comply with landmark tech regulations. These groups, including Airlines for Europe, Hotrec, EuroCommerce, and Ecommerce Europe, had previously expressed concerns about the potential impact of the EU’s Digital Markets Act (DMA) on their revenues.
The DMA aims to impose rules on tech giants like Google to give users more choice and offer competitors a fairer chance to compete. However, these industry groups fear the proposed adjustments could harm their direct sales revenues and exacerbate discrimination. In a joint letter to EU antitrust chief Margrethe Vestager and EU industry chief Thierry Breton, dated 22 May, they emphasised their mounting concerns regarding the potential consequences of the DMA.
Why does it matter?
Specifically, the groups worry that the proposed changes may give preferential treatment to powerful online intermediaries, resulting in a loss of visibility and traffic for airlines, hotels, merchants, and restaurants.
Despite Google’s acknowledgement in March that changes to search results may impact various businesses, including those in the European market, the company has not provided immediate comment on the recent concerns raised by these lobbying groups. The European Commission, currently investigating Google for possible DMA breaches, has yet to respond to requests for comment on the matter.
Microsoft’s recent deal with UAE-backed AI firm G42 could involve the transfer of advanced AI technology, raising concerns about national security implications. Microsoft President Brad Smith highlighted that the agreement might eventually include exporting sophisticated chips and AI model weights, although this phase has no set timeline. The deal, which necessitates US Department of Commerce approval, includes safeguards to prevent the misuse of technology by Chinese entities. However, details of these measures remain undisclosed, prompting scepticism among US lawmakers about their adequacy.
Concerns about the agreement have been voiced by senior US officials, who warn of the potential national security risks posed by advanced AI systems, such as the ease of engineering dangerous weapons. Representative Michael McCaul expressed frustration over the lack of a comprehensive briefing for Congress, citing fears of Chinese espionage through UAE channels. Current regulations require notifications and export licenses for AI chips, but gaps exist regarding the export of AI models, leading to legislative efforts to grant US officials more explicit control over such exports.
Why does it matter?
The deal, valued at $1.5 billion, was framed as a strategic move to extend US technology influence amid global competition, particularly with China. Although the exact technologies and security measures involved are not fully disclosed, the agreement aims to enhance AI capabilities in regions like Kenya and potentially Turkey and Egypt. Microsoft asserts that G42 will adhere to US regulatory requirements and has implemented a ‘know your customer’ rule to prevent Chinese firms from using the technology for training AI models.
Microsoft emphasises its commitment to ensuring secure global technology transfers, with provisions for imposing financial penalties on G42 through arbitration courts in London if compliance issues arise. While the US Commerce Department will oversee the deal under existing and potential future export controls, how Commerce Secretary Gina Raimondo will handle the approval process remains uncertain. Smith anticipates that the regulatory framework developed for this deal will likely be applied broadly across the industry.
The European Commission announced on Monday that it has classified Booking as a ‘gatekeeper’ under the Digital Markets Act (DMA), signifying its strong market influence. At the same time, the Commission has initiated a market investigation into the regulatory status of social media network X to delve deeper into its market dominance. Despite this, according to the EU, online advertising services such as X Ads and TikTok Ads have not been designated as gatekeepers.
In March, the European Commission identified Elon Musk’s X, TikTok’s parent company ByteDance, and Booking.com as potential candidates for gatekeeper status, subjecting them to stringent tech regulations. While Booking has been officially designated as a gatekeeper, a market investigation has been initiated to address X’s opposition to such a classification. ByteDance was previously labelled as a gatekeeper in July last year, but TikTok has contested this designation at the EU’s second-highest court.
Why does it matter?
The Digital Markets Act (DMA) represents a significant step towards regulating the market dominance of large tech companies. It imposes stricter obligations on these firms, compelling them to moderate content, ensure fair competition, and facilitate consumer choice by making it easier to switch between services. As the EU continues to navigate the complexities of digital market regulation, the classification of gatekeepers and subsequent investigations serve as crucial measures to promote fair competition and protect consumers’ interests in the digital sphere.
A complaint has been lodged against Microsoft Corp. with the Spanish antitrust regulator, alleging anti-competitive behaviour in the cloud computing market. The complaint, filed by Asociación Española de Startups, representing 700 companies, asserts that Microsoft is exploiting its dominance in the software sector to compel the use of its cloud services. The legal move is claimed to impede both cloud providers and customers within Spain’s startup ecosystem, hindering their international growth prospects.
According to the group, Microsoft’s imposition of technical and contractual barriers significantly affects cloud providers and customers, particularly startups in Spain. The association has urged the competition regulator, CNMC, to thoroughly investigate the matter. This complaint mirrors ongoing criticism directed at Microsoft for imposing unfair terms and high costs for running Windows and Office software on competitors’ cloud infrastructure.
The accusation against Microsoft comes amid regulatory authorities’ increasing global scrutiny of its Azure cloud business. Regulators in the EU, the UK, South Africa, and now Spain have raised concerns over potential anti-competitive practices in the cloud computing market. As the investigation unfolds, stakeholders await further developments to assess the implications for competition and innovation in Spain’s tech landscape.
Japan’s cabinet has approved a legislative proposal to curb the dominance of tech giants like Google and Apple by imposing major fines on those that restrict third-party access to smartphone apps and payment systems. This initiative mirrors the EU’s Digital Markets Act (DMA) and targets anti-competitive behaviour, threatening fines of up to 20% of their revenues.
According to government spokesman Yoshimasa Hayashi, this regulation is crucial for maintaining a competitive digital environment internationally and fostering innovation and consumer choice in software necessary for smartphone usage.
Concurrently, the Japanese government is escalating efforts to regulate social media platforms like Meta, addressing the surge in online scams that exploit celebrity images. The local unit of Meta has been criticised for its inadequate response to online scams that exploit celebrity images to commit fraud. Former Digital Transformation Minister Takuya Hirai has suggested that the Japanese Diet might summon Meta CEO Mark Zuckerberg to testify. He criticised Meta for being the ‘most non-compliant platform owner’ and highlighted the company’s insufficient efforts in combating these fraudulent activities.
The UK’s Competition and Markets Authority (CMA) has intensified its scrutiny of major tech players’ involvement in AI startups, targeting Microsoft and Amazon in particular. The CMA is examining Microsoft’s investment in Mistral and the hiring of Mustafa Suleyman, DeepMind’s co-founder, for its new AI division. Similarly, it scrutinises Amazon’s $4 billion investment in Anthropic. These moves have raised concerns about potential monopolistic control and stifling competition, prompting the CMA to solicit comments and potentially launch formal investigations.
Joel Bamford, CMA’s executive director of mergers, emphasised an impartial assessment of these deals and their impact on UK competition. CMA’s Chief Executive Sarah Cardell expressed ‘real concerns’ about the AI market, especially with six tech giants forming an ‘interconnected web’ of AI partnerships. Microsoft and Amazon now face a ‘phase one’ investigation to determine if their deals violate UK merger regulations and pose competition issues, with the possibility of further action in a ‘phase two’ investigation.
Why does it matter?
Microsoft’s €15 million investment in Mistral, coupled with Suleyman’s recruitment and Inflection AI’s integration, has drawn attention. Likewise, Amazon’s collaboration with Anthropic to leverage its cloud services and custom chips for AI models is under scrutiny. Legal experts like Alex Haffner view the CMA’s move as indicative of its keen interest in the evolving AI market. Both Microsoft and Amazon have pledged cooperation, with Microsoft defending such deals as promoting competition and Amazon highlighting differences from other partnerships.
The US Federal Trade Commission (FTC) has taken a significant step in reshaping employment practices nationwide by voting to ban noncompete agreements, deeming them unfair methods of competition. These agreements, especially prevalent in the tech industry, aim to restrict employees from joining or establishing competing businesses. Recent cases, including Amazon’s enforcement and retraction of a noncompete agreement for warehouse workers, have underscored the contentious nature of these agreements.
Under the new ruling, companies must nullify existing noncompete agreements and inform employees of the change. While existing agreements for senior executives are permitted to remain in effect, companies will be prohibited from implementing new noncompete agreements. The FTC defines senior executives as individuals involved in policy-making decisions earning over $151,164 annually.
In response to criticisms of noncompete agreements, the FTC has advocated for alternative measures such as trade secret laws and non-disclosure agreements. FTC Chair Lina Khan emphasised that noncompete clauses hinder wage growth, stifle innovation, and impede economic progress. The agency estimates that approximately 30 million workers are bound by noncompete agreements, prompting the ban’s potential to generate thousands of new businesses annually while enhancing healthcare affordability and increasing worker compensation.
Having initially proposed the ban in January 2023, the FTC anticipates that the new rule will be implemented 120 days after its publication in the Federal Register. This development marks a significant shift in labour practices, signalling a broader reevaluation of the impact of non-compete agreements on workers and the economy.
Japan’s antitrust watchdog has issued a directive to Google, stating that the US tech giant must address its advertising search restrictions that affect Yahoo in Japan. According to the Japan Fair Trade Commission, Google’s practices were found to impede fair competition in the advertising market, particularly in relation to Yahoo Japan Corp., which merged with Line, a Japanese social media platform.
The issue stems from Google’s keyword-targeted search advertising services, which Yahoo Japan utilised after a collaboration initiated in 2010. The Fair Trade Commission claims that Google imposed restrictions in its advertising agreement with Yahoo Japan that hindered competition in targeted search ads for over seven years. Google responded by dropping these restrictions following an investigation by the FTC into potential violations of the Anti-Monopoly Law.
In response to the commission’s findings, Google has pledged full cooperation and emphasised that the commission did not find outright violations of anti-monopoly laws. The company committed to implementing the commission’s directives to enhance search functions for Japanese users and advertisers. Meanwhile, Line Yahoo declined to comment on the matter.
Why does it matter?
Google will remain under scrutiny for the next three years to ensure compliance with necessary changes. However, the commission did not impose fines or other penalties on the tech giant, which remains popular in Japan. This action by the commission comes shortly after another legal setback for Google in Japan, where Japanese doctors filed a civil lawsuit against the company for allegedly allowing groundless derogatory and false comments on its platform. In response, Google stated its continuous efforts to combat misleading or false information through human oversight and technological solutions.
