The DMA is nothing more than ‘un coup d’épée dans l’eau’

Sep 18, 2023 | Comments

Image generated by CISPE using AI

The expression in French is ‘un coup d’épée dans l’eau’. There is not direct equivalent in English, but it perfectly describes the DMA – an ineffectual blow that strikes only the water.

Just a week after the confirmation of gatekeepers revealed the gaping holes in its targeting, rumours of a Statement of Objections against Microsoft confirm that the DMA is already dead in the water. These rumours suggest that even the Commission recognises that to act against the widely suffered unfair software licensing practices that restrict competition, it cannot rely on the DMA.

Yesterday’s blog from Nextcloud puts no faith in the DMA. The DMA will never help players such as Nextcloud, Slack and indeed CISPE, all of which have lodged formal complaints against Microsoft for the way it uses a variety of bundling, tying and discriminatory pricing and licensing terms to exploit the ultra-dominance of Microsoft 365 and harm rival products. The DMA’s failure to apply to gatekeepers’ software has rendered it powerless from the outset to tackle these widespread and wide ranging abuses of dominance.

We do, wholehearted, agree with Nextcloud in its analysis of Microsoft cynical engagement with the sector and with regulators. As Nextcloud correctly perceives:

Their [Microsoft’s] approach is clear: only concede the inevitable, and delay where possible.

Firm and timely action from regulators can secure concessions. We’ve seen it with earlier complaints from the cloud infrastructure sector that resulted in acknowledgment of harmful practices and . We’ve seen the success of the CMA in the UK in extracting significant concessions from Microsoft in cloud gaming. And we saw in the summer Microsoft’s willingness to unbundle Teams when faced with potential regulatory action. The big sticks of formal investigations and Statements of Objection, although hard to wield, do work.

However, the voluntary commitments made by Microsoft in the hope of deflecting effective measures, are not enough. Its paltry efforts with Teams have seemingly failed to convince the Commission, and no one should be fooled by its limited, unilateral moves in other areas.

For all the fanfare around the DMA, those harmed by anti-competitive practices of dominant software companies must still rely on traditional competition actions under Article 102. There is no resolution under the DMA and we therefore urge the Commission to instead take the effective shot by opening formal investigations into Microsoft’s acknowledged discriminatory behaviours that restrict choice and raise costs for customers moving to the cloud across Europe.

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