Tech giants in our sights

Cartel office warns against concentration of power through AI

The antitrust authorities are currently conducting seven proceedings against the US companies Amazon, Google, Meta, Apple and Microsoft.

(Bild: AFP)

The German Federal Cartel Office has warned of a restriction of competition between internet companies as a result of artificial intelligence. Andreas Mundt, head of the Federal Cartel Office, warned of an "increase in power at different levels of value creation".

"There is a great danger that an even greater concentration of digital markets and an increase in power at different levels of value creation (...) will take hold," said Mundt at the presentation of the antitrust watchdog's annual report in Bonn on Wednesday. The competition authorities must quickly prepare themselves to "deal with the competitive effects of artificial intelligence".

Like the EU Commission's competition watchdogs, the antitrust authority is already taking intensive action against possible breaches of competition by internet giants.

"The power of the big tech companies is still the number one issue for us competition authorities worldwide," said Mundt. The Cartel Office is currently conducting seven proceedings against the US companies Amazon, Google, Meta, Apple and Microsoft.

New control instruments
The German authority had received new instruments from the legislator in order to be able to take more effective action against overpowering online companies. The competition authorities can now certify that online giants have an "overriding cross-market significance for competition".

The Cartel Office has already done this in the case of Amazon. On this basis, it is possible that the group will be subject to stricter controls and that the competition authorities will prohibit certain types of behavior in a second step. The German Federal Court of Justice confirmed the cartel office's decision at the end of April.

"For all ongoing proceedings - against Amazon, Google, Meta, Apple and Microsoft - this means a lot of tailwind," said Mundt.

"Less and less choice"
Mundt also sees dangers for consumers. He currently sees the "big techs" such as Google and Amazon as gatekeepers - they have positioned themselves at a gate through which consumers in the digital world can pass and gain access to the offerings of other service providers that do not belong to the major US corporations.

So there are still "outside options", i.e. offers from other companies, says the head of the antitrust authority. "In AI, these no longer exist - you are kept inside the ecosystem, there are no more gatekeepers, there is only a self-contained system." The answer would then only come from Google, for example.

The consumer would remain in a closed digital world and would no longer know whether there were any other better services. The big techs would dominate the digital world and divide it up among themselves. "The fact that you as a consumer have less and less choice is the big concern we have," said Mundt.

Call for a European cloud
Powerful clouds, i.e. external data centers for data processing and storage, form the basis for AI applications. The cloud segment is dominated by the big techs. Europe must become independent of cloud services from other continents, says the competition watchdog. "We need the European cloud solution." This is also necessary for the digitalization of administration, he says.

His authority could not possibly take action against a Big Tech and store data intended for internal purposes on the cloud of the respective Big Tech. A European cloud could also help to defuse the danger of a further concentration of power for the IT giants. "We need to see that we can manage our own infrastructure here."