Since the conception of the Digital Markets Act (DMA), CISPE has argued for the inclusion of cloud infrastructure providers fully and comprehensively in scope. In a market where European players have seen share collapse by 50% in the last 4 years to just 13%, the DMA should have been a tool to impose ex ante commitments on the hyperscale providers which dominate the European sector.
Alas, thanks to the heavy lobbying by dominant players, although cloud computing services are mentioned as core platform services in the text, the DMA has been unable to designate any hyperscale cloud infrastructure provider as a gatekeeper – thus failing to have any impact on restoring fair competition to this fundamental aspect of the digital market.
Given the overwhelming dominance of a handful of players in the European cloud computing market, there can be no serious doubt that they fall squarely within the principles behind three conditions of gatekeeper designation. The available market evidence already puts beyond dispute that they exert a decisive impact on the internal market, control indispensable gateways for business users and end-users, and enjoy entrenched and durable positions. This scale and vertical integration make it entirely foreseeable that such dominance will only deepen in the near future especially with the bundling of AI technologies and cloud.
In its submission to the DMA review process, which can be read in full here, CISPE argues that structural reforms are needed, not the simplistic addition of new service categories to an existing shopping list of products and services to be considered in scope. It is this service-by-service consideration of user thresholds for gatekeeper status that has wrong-footed the legislation when faced with the rapid rise of AI services not foreseen at time of drafting. Specifically, CISPE calls on the European Commission to amend the definition of “active end users” and “active business users” in the Annex of the text, as well as the methodology and indicators for identifying and calculating users.
Had a principle-based approach, as CISPE advocated, been adopted then gatekeeping behaviours could have been challenged across the sector, irrespective of specific service types. The inter-related nature of AI, Cloud and essential associated services such as Identity and Access Management (IAM), as well as the increasing overlaps and merging of service types, mean that a wider view of dominance is required if the DMA is truly to achieve its core objective: ensuring fair and contestable markets for European businesses and citizens.