Cloud Computing Providers' Anti-Competitive Practices Should Be Curbed by EU Tech Rules: Study

The new EU rules should also cover software licensing, the report said.

By Reuters | Updated: 26 October 2021 16:21 IST

Cloud Computing Providers' Anti-Competitive Practices Should Be Curbed by EU Tech Rules: Study

Amazon's Amazon Web Services was the leading provider in the second quarter

Highlights

The new EU rules should also cover software licensing
EU lawmakers have to thrash out the draft DMA with EU countries
EU lawmakers may be lenient towards cloud computing companies

Draft EU rules to curb the power of Amazon, Apple, Alphabet unit Google, and Facebook should also tackle providers of cloud computing services for possible anti-competitive practices, a study said on Tuesday. The report comes amid concerns that some EU lawmakers who are reviewing the Digital Markets Act (DMA) proposed by EU antitrust chief Margrethe Vestager may be lenient towards cloud computing companies.

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

Frederic Jenny, chairman of the Organisation for Economic Cooperation and Development's Competition Committee, put together the study, in his personal capacity, for trade body Cloud Infrastructure Services Providers in Europe (CISPE).

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The new EU rules should also cover software licensing, the report said, with respondents citing unfair terms imposed by some of the big software companies to access their cloud infrastructure.

"The DMA does say that cloud infrastructure can come within the ambit of the DMA but it is not obvious that all the suppliers are covered," Jenny told Reuters in an interview.

"For example, it doesn't seem that Google Cloud qualifies under the DMA as a gatekeeper or IBM Cloud or Salesforce."

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Potential anti-competitive practices by some companies could include unfair pricing techniques or efforts to make users' move to a rival technically difficult, he said.

Jenny said the study interviewed some 25 companies that use cloud computing services, some of which cited issues such as unfair licence terms that force customers to pay again to use software they already own when they move to a competitor.

Respondents were also concerned about providers bundling software products with their cloud infrastructure to make rival products either less attractive or more expensive.

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

EU lawmakers have to thrash out the draft DMA with EU countries before it becomes law, possibly in 2023.

© Thomson Reuters 2021

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