To regulate or not to regulate? In terms of tech, the European saga that began with the Microsoft decision in 2004 is entering a new phase. Because after procrastinating, America, which invented competition law in 1890 (Sherman Act) then imposed it on Europe in 1957 with the help of Germany, is certain: its technology is an asset in the confrontation with China! Not a week goes by without Donald Trump threatening Europeans with reprisals if they use their rights against American tech. Many players, initially unsuspected of Trumpism, are also dropping their punches: Apple requested on September 25 the repeal of the Digital Markets Act, the legal cathedral of European regulation in tech matters.
The question, in reality, is older. Barack Obama, as early as February 2015, stigmatized a right used by Europeans opportunistically to mask their lack of innovation. Businesses followed suit. In 2016, Tim Cook described the Commission’s injunction – confirmed by the CJEU in 2024 – on Apple to repay 13 billion in illegal state aid to Ireland as “total political crap”.
In February 2022, Meta threatened to no longer offer Facebook and Instagram in Europe if it was not allowed to share European user data with the United States. In the summer of 2024, a violent exchange of arms between Elon Musk and digital commissioner Thierry Breton had a role in the ousting of the latter.
It is an open secret that the Commission lacks human resources
In such a context, the Commission’s action in terms of competition in tech is in the spotlight even though the EU has never had so many and such powerful tools at its disposal. Take the cloud for example. The United Kingdom, for several quarters, wishing not to be fooled by the EU, has been interested in the subject: it is investigating whether Microsoft and AWS – who will make every effort to demonstrate the opposite through procedures protecting defense rights – are engaging in anti-competitive practices on the British cloud market. In particular, as far as Microsoft is concerned, using its licensing system to lock in its customers.
A crucial moment
The Commission is aware of these issues. She highlighted October 9 “the essential importance of competitive and innovative cloud markets for the European economy”. She would have liked to use the DMA to qualify large cloud companies (the “hyperscalers”) of “gatekeepers” and apply the full force of its new regulation to them. There were reasons against this. Legal reasons: to apply the DMA imposes a threshold of 45 million users, which is difficult to achieve in the cloud. Practical reasons: it is an open secret that the Commission lacks human resources.
But aren’t these also political reasons? The European Union, proof of the extent of its resources, in addition to the DMA, still has Article 102 of the Treaty, thanks to which it has been tracking abuses of dominance since 1957. It is therefore not helpless to regulate competition in the cloud. However, strangely, deaf to the latent competition from the British on this subject, it has still not ruled on the complaints which have been addressed to it for more than a year, fueling the idea, very present since the trade agreement last July, that it is afraid to apply its rights.
For the EU, and especially the Commission, the moment is crucial. After having reduced the number and severity of its decisions in matters of cartels, trimming its principles in matters of state aid, its hesitations to use its instruments have awakened an old dragon: taking away its federal competence in matters of competition and entrusting it to an independent authority. For those who understand the centrality of the Directorate General for Competition to the Commission, State within the State, this would be a decisive blow. Ultimately, the question for the Commission would no longer be to open this or that investigation in the field of the cloud or another area of tech. It would be: “To be or not to be? “.
*Les Arvernes is a French group of senior civil servants, teachers, essayists and entrepreneurs created in 2012.
