For Margrethe Vestager, the cloud market does not raise concerns against competition

EU Competition Commissioner Margrethe Vestager said the cloud computing market was currently not raising concerns against competition. To justify its position, it cited the existence of the Gaia -X association – a project aimed at building sovereign clouds by sector – that would have the capacity to adequately stimulate competition and develop a credible alternative.

Compete against AWS and Azure
I generally consider it pro-competitive when you can show potential customers that there are more than two giants where you can place your business.“, he explains in Reuters during an interview. These two giants are Amazon Web Services (AWS) and Microsoft Azure. According to a Synergy Research Group study published in September, AWS, Azure and Google Cloud alone capture 69% of the European market. They also invested heavily there: more than 14 billion euros of investments in the last four quarters. The goal: to upgrade and expand their network of hyperscale data centers.

European players are far behind. Deutsche Telecom leads with 2% market share, followed by companies such as OVHcloud and Orange. The latter is also concerned about the area taken by American companies. Several antitrust complaints have been filed with the European Commission by OVHcloud and the Coalition for a Level Playing Field against Microsoft. They accuse it of favoring its own services by limiting consumer choice in the market for cloud computing services.

Gaia-X, a truly reliable alternative?
Regarding the weight of Gaia-X, doubt is allowed. In fact, this structure is slowly evolving despite intense ambition. At the fourth plenary of the France Hub, members studied the progress of the work for each sector. Automotive, with Catena-X, as well as agriculture and agribusiness are the most advanced projects, reports LeMagIT. For education or energy, it’s slower.

In addition, large cloud companies are not out of the project. Among the more than 300 Gaia-X members, we find Salesforce, Palantir, Oracle, Palo Alto, Microsoft, Amazon or Google. On the other hand, they have no right to sit on the board of directors of the association. This does not prevent them from participating in meetings and adding their two cents, as Arnaud de Bermingham, president and founder of Scaleway, told us, justifying his decision not to renew his membership in Gaia- X.

He denounced “a complex caused by the dominant actors to ensure that the initiative is as slow as possible and to protect their own interests“. However, in this matter, time is of the essence:”the speed of Gaia-X is not the speed of the cloud market that will represent in two years more than 300 billion dollars“.

Legal risks are reduced
The presence of American companies has also raised legal concerns. In fact, by repealing the Privacy Shield, the Court of Justice of the European Union questioned the legality of the flow of personal data in the United States. As an application to this historic decision, the use of Google Analytics has been declared illegal by several authorities, including the National Commission for Computing and Liberties (Cnil).

Although a new agreement seems impossible because it requires drastic changes to American law, the European Commission has announced that it has found “agreement in principle“in a new framework. Its contents have not yet been published.

In the same week, Parliament and the EU Member States reached an agreement on the Digital Markets Act (DMA). Aiming to restore fair competition, this text provides strict obligations for gatekeepers (a player with the ability to prevent access to the market or an ecosystem with other companies). Cloud computing services are concerned, which could reshuffle cards by leaving more space for European gamers if they take over.

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