The rise of digital technologies is fostering the emergence of new ecosystems and the appearance of services based on new, essential facilities. In order to understand these changes, the Autorité initiated several large-scale sector-specific inquiries to study in depth the issues raised by these rapidly expanding phenomena. At the European level, the behaviour of certain players is also currently being closely scrutinised in the context of litigation procedures.
In January 2022, the Autorité announced the launch of a broad sector-specific inquiry into the market for cloud services (data storage via a cloud). Although these markets are dominated by primarily American and Chinese giants (known as hyperscalers), they are currently heavily invested by French and European players, whose activity is undergoing rapid expansion, with an average annual growth expected to exceed 25% in the coming years. The Autorité intends to conduct a comprehensive analysis of the competitive functioning of the sector, with the objective of examining the competitive dynamics, the players, their contractual relationships (alliances, partnerships) but also to study more broadly the consequences of the emergence of the cloud in all sectors of the economy, in close collaboration with the sectoral authorities. Several months of study will be required, with final findings expected in early 2023 (Press Release, 27 January 2022).
As regards litigation, a coalition of around 30 European cloud players Coalition for a Level Playing Field, including eight French companies, filed a complaint with the European Commission against Microsoft in early 2021, concerning its OneDrive storage offering. Microsoft was accused of tying its cloud offering to its other software offerings, such as Teams or Windows Services, thereby creating a barrier for its competitors. The issue is particularly important for consumers’ freedom of choice in terms of their digital tools, in particular as regards storage and sharing. Another group of companies, including French player OVH Cloud, also filed a complaint against Microsoft with the European Commission in the summer of 2021, for practices that allegedly limit consumer choice in the market for cloud computing services via tied selling and preferential pricing when its customers for office softwares (Microsoft office 365 suite that includes Word, Excel, Teams, etc.) install the software on their Azure cloud platform.
FinTech and BigTech
The banking and financial sector is currently undergoing profound changes, characterised by the development of FinTech and BigTech companies and their business models which differ from those of the traditional, established players, in particular as regards the emergence of innovative payment methods for consumers and new diversified services. In particular, contactless payment by bank card, mobile phone and connected smartwatch has developed to a significant extent, in conjunction with the rise of e-commerce. All of these services, channels and alternative payment methods are based on recent technological developments, in particular cloud computing and blockchain, which, although not specific to the payments sector, are likely to have a profound and lasting impact on the way this sector works.
In its sector-specific inquiry published in April 2021, the Autorité highlighted the great “agility” of FinTech to develop new innovative services while seizing the opportunities created by regulation. It also noted that the traditional banking actors resorted to various strategies to keep abreast of the most innovative segments of the market: takeovers via acquisitions, equity investments, internal development, etc. Finally, the overview presented in its study highlighted the emergence of large Big Tech platforms, which enjoy multiple advantages. In the Autorité’s view, this in-depth assessment is an essential preliminary step. It will subsequently allow the Autorité to address effectively the various competitive harms that may arise from the risks identified. These include the risk of strengthening the market power of BigTech and foreclosing consumers, the risk linked to data ownership by payment service providers managing accounts, the competitive risks associated with the use of blockchain, and the risk of calling into question the universal banking model and marginalising the traditional banking players (Opinion 21-A-05 of 29 April 2021, for more details, see p. 57).
As regards litigation, the behaviour of certain players is already being closely scrutinised at the European level. This is the case in particular for Apple, whose payment system is being closely examined by the competition authorities. Indeed, the European Commission opened an investigation in June 2020 to assess whether Apple’s behaviour as regards Apple Pay violated EU competition rules (EC Press Release, 16 June 2020). Margrethe Vestager stated in this regard that “It is important that Apple’s measures do not deny consumers the benefits of new payment technologies, including better choice, quality, innovation and competitive prices.” For its part, the Dutch competition authority (Autoriteit Consument & Markt – ACM), fined Apple for preventing dating apps, such as Tinder, Bumble and Meetic, from using other payment systems in addition to Apple’s system, within the AppStore. Noting Apple’s failure to comply with its decision, the ACM fined it €5 million per week until it brought its behaviour into compliance. In June 2022, the ACM agreed to Apple’s proposal to change its terms as regards dating apps. Different payment methods will now be authorised in Dutch dating apps (ACM Decision, 11 June 2022).