ISTANBUL
Major tech companies, most of which are based in the US, are under a review by the EU due to their practices that make consumers to depend on certain ecosystems and prevent them from switching services.
US-based tech majors Microsoft, Alphabet’s parent firm Google, Microsoft-backed OpenAI, Facebook, South Korea’s Samsung and Chinese social media firm TikTok are in the radar of the EU, according to an official.
“A major risk we see is big tech players leveraging their market power across different markets within their ecosystem,” EU Commissioner for Competition Margrethe Vestager said Friday during her address at the European Commission workshop on Competition in Virtual Worlds and Generative AI in Brussels.
“Strong competition enforcement is always needed at times of big industrial and tech changes. It is then that markets can tip, that monopolies can be formed, and that innovation can be snuffed out. When competition enforcement steps in, it allows different business models and new ideas to develop. So we must get ready,” she added.
Vestager said artificial intelligence (AI) and metaverse are developing at “breakneck speed,” and the EU “cannot just sit back and see how things pan out.”
“Concentration is especially high at the top of the value chain, where large foundation models are trained to be used in various applications. These models need vast amounts of data, computing power, cloud infrastructure, and talent, which only a few players have,” she added.
The commissioner said the EU has been gathering specific information on the competition dynamics in the AI industry for several months, by opening calls for contributions and by sending requests for information to several companies in the industry.
She said the EU in March sent formal information requests under its antitrust rules to several big tech players, including Microsoft, Google, Facebook and TikTok.
After reviewing their replies, it sent a follow-up request for information on the agreement between Microsoft and OpenAI, to understand whether certain exclusivity clauses could have a negative effect on competitors.
Vestager said the EU has also sent requests for information to better understand the effects of Google’s arrangement with Samsung to pre-install its small model Gemini Nano on certain Samsung devices.
“So we are closely monitoring distribution channels to make sure businesses and consumers still have a wide range of choices among foundation models,” she said.
The European Commission this week said Apple is breaching its Digital Markets Act with its App Store rules that prevent developers from freely steering consumers to alternative channels for offers and content.
