The Dutch competition authority says more changes are needed to the EU’s proposed Data act to stimulate competition between cloud providers.
A market study of the Netherlands Authority for Consumers and Markets (ACM) shows that it is hard for users of cloud services to switch providers. In addition, it is not easy for them to combine cloud services offered by different providers. As a result, there are risks to the price, quality, and innovation of cloud services.
With the draft version of the upcoming Data Act, which is still being discussed at the EU level, it will become easier for users to switch cloud providers. However, that alone is still not enough for ensuring a well-functioning market for cloud services.
That is why ACM proposes several amendments to the Data Act so that it also becomes easier for users to combine cloud services (so called interoperability). In addition, ACM will launch a follow-up investigation in order to determine to what extent the switching barriers cause competition problems in practice, and whether they can already be dealt with today.
Cloud services enable businesses and organizations to use high-quality technological IT services (such as external storage capacity and computing power) without having to invest in the required equipment, software, and staff.
As such, cloud providers play a key role in the digitalization of business processes, where data processing and data analysis are becoming more and more important. Dutch businesses are frontrunners of cloud usage: in 2021, 65 percent of Dutch businesses used cloud services, whereas in the rest of Europe, that percentage was, on average, 41 percent.
“In various sectors, data processing and digitization have become essential to a company’s competitiveness. With their innovative applications, cloud services play a critical role in that dynamic,” says Manon Leijten, Member of the Board of ACM. “As a result, the position of providers of cloud services in the digital economy becomes more and more important. ACM sees risks to competition in this market, and finds it important to protect businesses and organizations against those risks. That is why we suggest several improvements to the Data Act, for which a first proposal has been put forward. These suggestions are aimed at making it easier to combine different cloud services in a flexible manner so that businesses are able to choose and take out cloud services from different providers, and, in that way, are able to get the services that meet their needs best, and also at the best price possible. In addition, it will also make it easier for new, innovative competitors to enter the market.”
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