Anti-trust update: Digital markets Act

Last Thursday, the Digital Markets Act went into effect with the first ‘Gatekeepers designations’. The new EU rules would require Microsoft to stop some of its alleged market-distorting behavior by March 2024, but even if implemented swiftly it is unlikely to create a more equitable market. What we need is more action from the European Commission.

The Coalition for a level playing field, when filing a complaint nearly 3 years ago, demanded the EU ensures:

• No gatekeeping (in other words, by bundling, pre-installing and/or pushing Microsoft services) for a level playing field.
• Open standards and interoperability that make an easy migration possible. This gives consumers a free choice.

The Digital Market Act, according to the EU’s own press release, requires gatekeepers like Microsoft to allow users to “un-install pre-installed apps” and “provide choice screens for key services.” It also demands that gate keepers “allow third parties to inter-operate with the gatekeeper’s own services” and includes a “ban on ranking the gatekeeper’s own products or services in a more favorable manner compared to those of third parties.”

This would create an expectation that some of the anti-competitive behavior, like bundling and advertising (if not nearly enforcing) OneDrive usage with Windows would cease by March 1st 2024. Of course, the bundling of OneDrive in Microsoft 365 is still there. So the Digital Markets Act, as it currently stands, even in the unlikely case that it is fully and speedily implemented by Microsoft, will only address a small part of Microsoft’s market-disrupting behavior.

Unfortunately, the complaint by the Coalition, launched early 2021, has not resulted in any action, despite repeated conversations.

Awareness of anti-competitive behavior

August 31, a month after an official investigation into the bundling of Teams kicked off, Microsoft announced a concession to EU pressure. Rather than wait until the EU had determined what changes Microsoft had to make to their unfair business practices, they decided to make a minimal change by un-bundling Microsoft Teams from Office and Microsoft 365. This is a clear signal that Microsoft is aware of their anti-competitive behavior under EU regulations, as otherwise one would not expect such a heavily lawyered-up firm to make such changes. Microsoft is not known for handing out gifts.

Rather, their approach is clear: only concede the inevitable, and delay where possible.

Given this, one can expect some changes if and when a proper investigation in Microsoft kicks off – but those actions would take long and go slow. Nextcloud and it’s partners in the Coalition therefor call on the European Commission to act on their complaint from early 2021 and initiate a proper investigation, sooner rather than later.