Microsoft has been included in an exclusive group of technology giants under a special abuse control regime in Germany. The Federal Cartel Office (FCO) confirmed that the software giant could face restrictions if the competition authority deems it necessary to intervene. This regime, which will last for five years, gives German authorities broader power to monitor Microsoft's activities, especially around its use of generative artificial intelligence. Although the regulator has not yet initiated specific proceedings, the appointment of Microsoft under this regime marks an important milestone in the regulation of big tech in Europe.
Microsoft's Power in the Cloud and AI
Microsoft's growing influence in the AI field, particularly through its collaboration with OpenAI, has caught the attention of antitrust regulators. In recent years, the relationship between the two companies has come under scrutiny as Microsoft has played a key role in OpenAI's growth. Although in November 2022 the FCO determined that this collaboration did not meet the threshold for a traditional merger review, the situation could change under the new legal framework. FCO chairman Andreas Mundt underscored Microsoft's dominant position in the software market and highlighted the close interconnectedness of its products and services, driven by the increasing use of cloud and artificial intelligence. "Microsoft's ecosystem is stronger and more interconnected than ever, thanks to its position in key technologies such as cloud and AI," Mundt said. Microsoft has integrated tools such as Copilot, its AI assistant, into many parts of its ecosystem, and its strength in cloud computing has allowed it to partner with innovative vendors. This ability to offer AI-as-a-service models on its Azure platform and integrate them into proprietary products has strengthened its market influence.
Enhanced Control in Europe
Microsoft's designation under this special regime in Germany follows an investigation initiated in March 2023. This measure allows the FCO to apply proactive controls to prevent the power of big tech from limiting competition and innovation by other players in the market. Germany has already applied this law to other tech giants such as Amazon, Apple, Google and Meta. This legislation, which precedes the European Union's Digital Markets Act (DMA), gives Germany more freedom to intervene in Microsoft's activities, including in areas such as AI, compared to the limitations imposed by the DMA. The DMA only regulates specific platforms, such as the Windows operating system and the LinkedIn social network in Microsoft's case.
However, the FCO's approach applies to the entire company, allowing it to impose broader controls in any area where it detects anticompetitive practices. To this designation, Microsoft has responded collaboratively. Its spokesperson, Robin Koch, stated, "We recognize our responsibility to support a healthy competitive environment and will strive to be proactive, collaborative and accountable in our work with the FCO." Microsoft has also reaffirmed its commitment to invest in the growth of the German digital economy.
