European Lawmakers seeking exclusions for gatekeepers’ enterprise and database software risk rendering the Digital Markets Act ineffectual

Oct 14, 2021 | News

Cloud infrastructures are critical services that underpin Europe’s digital transformation. Not keeping enterprise and database software from the Digital Markets Act, as proposed by some MEPs, will set this landmark digital regulation up for failure from the start. It will also undermine the EU data and Cloud Alliance and betray the European values at the core of the Gaia-X initiative.

If Europe is serious about strengthening its technological sovereignty, strategic autonomy, and the companies that underpin it, enterprise and database software must be in scope. Not having enterprise and database software – defeats the purpose of the DMA and is an own goal for Europe.

This exclusion would mean, for example, that the DMA protection against client lock-in, bundling, and tying would not apply to enterprise software licensed by gatekeepers.  This would increase the dependence of European companies and their customers, from SMEs to large public sector organizations, on legacy software providers which are seeking to leverage predominance in on-premises software and unfairly capture market share in cloud infrastructure services.  We know, from soon-to-be-published research undertaken by an eminent authority on competition, that some software firms already use license terms to restrict choice and undermine the competitiveness of the cloud infrastructure services market.

This is exactly the type of issue that the DMA must address. As the European Commission correctly assessed, tech companies cannot wait for the courts to rule on these practices: competition cases can take years and many European cloud companies would be pushed out before any resolution.

This is why the DMA must ensure that all practices used by dominant software providers to limit users’ choice of cloud infrastructure services are prohibited. Gatekeepers in market segments including productivity, operating systems, enterprise, and database software, should not be allowed to continue to use their dominance to unfairly capture market share in the underlying cloud infrastructure market.

Europe’s economic growth, its post-pandemic recovery, and its future technological leadership is at stake and rely on a successful and innovative tech sector that can compete on fair terms with dominant players.

The DMA can help deliver that for Europe, and I hope Members of the European Parliament will not waste this historic opportunity.


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