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Microsoft Says More Coming to Address EU Teams Antitrust Concerns

Report from Bloomberg

In Brief – The Microsoft President Brad Smith has said that while the company has “done a lot” to address the concerns of European competition regulators regarding how its Teams product is integrated with its Office 365 and Windows software suites, they will do more. Slack filed an antitrust complaint with the European Commission accusing Microsoft of illegally tying Teams to Office and Windows and the Commission opened a formal investigation in mid-2023. A formal antitrust complaint from the Commission is reportedly being prepared. Last fall, Microsoft offered to provide versions of Office and Windows in Europe without Teams, as well as offer a stand-alone Teams product. In April 2024 they announced that they would roll those changes out globally, saying that the expansion "addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardize their purchasing across geographies." Issues over pricing between the different services have plagued the offers. For example, the pricing of the stand-alone Teams was $5.25 per month, while a software buyer would only save $2.25 per month by buying Office 365 without Teams.

Context – Microsoft won Commission approval of their massive Activision acquisition with a regulatory good behavior campaign. Addressing concerns with company practices integrating its market-leading Windows OS and Office 365 software, component applications, and its massive cloud business, have been at the top of the list. Along with the Teams investigation, European cloud services providers complain that Microsoft uses software licensing to pull customers into its cloud infrastructure, and NextCloud has complained that Microsoft unfairly bundles its OneDrive cloud system with Windows. The Windows OS is a gatekeeper core platforms under the Digital Markets Act (DMA). Apple and Meta pricing features as part of Commission DMA investigations. Teams-related pricing could eventually be dealt with through the DMA.

Some AI Company Employees Want New Whistleblower Protection

Report from the New York Times

In Brief – A group of 13 current and former employees from top AI companies, including 11 from OpenAI, one current employee of DeepMind who previously worked for Anthropic, and another former employee of Anthropic, have signed an open letter asking AI companies to foster transparency about risks from their AI systems and protect employees from retaliation if they speak out about their AI safety concerns. “So long as there is no effective government oversight of these corporations, current and former employees are among the few people who can hold them accountable to the public,” says the letter. They call for a “verifiably anonymous process for current and former employees to raise risk-related concerns to the company’s board, to regulators, and to an appropriate independent organization with relevant expertise.” Some of the letter writers have ties to the “effective altruism” movement as well as notable past tech whistleblowers. They cite AI risks including exacerbating inequality, misinformation, and even the loss of human control potentially resulting in human extinction and warn that “silencing researchers and making them afraid of retaliation is dangerous when we are currently some of the only people in a position to warn the public.”

Context – OpenAI has been at the forefront of AI mania since it publicly released its human-sounding chatbot and openly talked about super-powerful AI causing huge harms, backed calls for regulation, and had soap opera-like internal operations. Tech industry whistleblowers are an increasingly common occurrence. Microsoft recently had an AI-focused one to add to Facebook, Amazon, TikTok, Uber, and Instagram. Now they are announcing themselves ahead of time. More than a year ago, the AI doomsday contingent had an open letter calling for a six-month global AI moratorium or regulation. It came to nothing. A high profile sub-clash between the AI doomers and those who think Large Language Models might have inherent flaws that will keep them from super-intelligence is the recent spat between Elon Musk and Meta's Paul LeCun.

US Antitrust Agencies Agree to Split Up Top AI Investigations

Report from New York Times

In Brief – The US Department of Justice (DoJ) and Federal Trade Commission (FTC) have agreed to split up what they believe are the top antitrust investigations in the AI sector, with the DoJ taking the lead to investigate chip giant Nvidia while the FTC investigates the antitrust implications of Microsoft’s investments in, and relationship with, OpenAI and AI startups such as Inflection AI. Agency talks began months ago to determine which would take the lead looking into the unusual Microsoft-OpenAI relationship that was highlighted by Sam Altman jumping to Microsoft a day after he was deposed as CEO of OpenAI. Nvidia’s emergence as the dominant global supplier of top-end chips and processors for many AI applications, which has resulted in the company growing into the world’s second most valuable company (behind only Microsoft), created a second major AI sector antitrust concern and led to the DoJ Antitrust Division taking the lead on that portfolio. The two agencies engaged in similar jurisdiction negotiations in 2019 over four digital giants, with a division of leadership that has cases involving Google and Apple at the DoJ, and Amazon and Meta at the FTC. The AI agreement will see DoJ continuing its leadership role related to Google AI activities and the FTC related to Amazon’s AI activities.

Context – One mantra of tech regulation advocates is that governments should not make the “same mistakes” with AI that they made with social media, including more activist competition policy. However, startup OpenAI emerged as the leader in LLM chatbots, while Clearview AI pulled off a similar surprise beating the incumbent digital giants on facial recognition. Conventional wisdom might hold that having the largest data sets and biggest stock of GPU “compute” confers an unbeatable advantage to the largest incumbents, but some experts see the smaller, targeted, specialized systems may prove more efficient. Innovation might continue to be key. Regardless, the EU Competition Authority and UK CMA are on the AI beat too.

UK Retailers File Class Action Lawsuit Targeting Amazon

Report from Silicon Republic

In Brief – The British Independent Retailers Association (BIRA) has filed a class action-style lawsuit against Amazon in the country’s top antitrust court. The UK retailers are claiming £1bn in damages for what it describes as illegal misuse of non-public retailer data to engage in a “product entry strategy” to unfairly compete with the retailers, as well as manipulation of the “Buy Box” to influence shoppers to purchase products that brought greater profits to Amazon. The CEO of BIRA said, “If small business want to sell online, Amazon is the dominant marketplace in the UK. While the retailers knew about the large commissions charged by Amazon, they did not know about the added risk of their trading data being used by Amazon to take sales away from them.” In 2023, the UK Competition and Markets Authority (CMA), the country’s competition regulatory, accepted voluntary commitments from Amazon to give third party sellers a “fair chance” to be featured in the Amazon Marketplace Buy Box, as well as saying that they will not use Marketplace data obtained from third-party sellers to give itself an unfair competitive advantage.

Context – Amazon is the largest online retailer, the largest ecommerce marketplace provider, and the largest ecommerce fulfilment services provider. Unlike true marketplaces, Amazon handles the goods for most of their top marketplace sellers as if they were Amazon retail goods. And through the Prime program, and the Buy Box algorithm, Amazon directs most consumer purchases to goods that involve FBA fulfillment and very high fees. Complaints about Amazon misusing third-party seller data to grow its own retail business are years old, but they now largely miss the point. Amazon’s most profitable ecommerce business is not its own retail sales. Third-party sellers using FBA logistics bring far higher margins. The Amazon Buy Box settlement with the European Commission involving logistics, and the Buy Box component of their CMA voluntary commitments, are more important than Amazon promises not to use seller data to unfairly grow their own low margin retail business.

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Platform Economy Insights aims to provide small-to-mid-sized digital platform business leaders, investors and firms that support industry growth, and public officials, staff and media who track the platform economy, with expert analysis of public policy trends impacting the digital platform industry globally. 

Executive Editor Brian Bieron and Senior Advisor Tod Cohen are recognized Internet, trade and platform policy leaders who have served as top global public policy experts to some of the Internet industry's leading platform businesses. They are now providing insights, analysis and reporting to wider audiences through a public policy platform that challenges the reach of all but the largest Internet industry public affairs teams.

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