OK, the title was only meant to catch your attention. And to foreshadow three – albeit separate – topics of this post: AI and antitrust, a screening regime for outbound investments, and a hefty antitrust sports battle. New developments on all of these topics warrant attention.
Rise of the machines: A global approach to AI
Competition regulators around the globe are currently struggling with the question of whether and how to assess the developments in the AI space and when is the right time to step in. Four of the world’s major competition enforcers – the European Commission, the UK CMA, and the FTC and DOJ from the US – have come forward and published a joint statement on competition in AI this week. The regulators lay out a joint view on how to look at AI from an antitrust perspective.
Their aim is to safeguard competition for AI technologies and to prevent the abuse and consolidation of (existing) market power. The statement lays out three main risks: The concentration of control over key inputs like chips and specialist expertise; the entrenchment or extension of market power in AI-related markets; and arrangements between key players (partnerships, investments, cooperations etc.).
To address these risks, the regulators name three principles:
- Fair dealing: The statement emphasizes caution against exclusionary tactics and finds that the “AI ecosystem will be better off the more that firms engage in fair dealing”.
- Interoperability: AI products/services and their input should be interoperable with each other. Maybe with Apple’s claims on DMA compliance in mind, the statement notes that “Any claims that interoperability requires sacrifices to privacy and security will be closely scrutinized”.
- Choice: Scrutiny is also to be applied to any lock-in mechanisms – this “also means scrutinizing investments and partnerships between incumbents and newcomers”. This seems to have been written with a view to partnerships, in particular by Microsoft, with smaller AI players that have recently come under review.
Finally, the regulators also remark that they are mindful of risks of AI enabling collusion or other anticompetitive behaviours, and of consumer protection threats associated with AI.
Outbound investment screening: Soon coming over the pond?
AI could also be affected by the next topic: The screening of foreign investments into domestic companies is an established practice these days. However, last year, the US introduced the screening of certain US outbound investments (so investments going from the US into other countries). The European Commission is considering whether something similar should be put in place in Europe, and had conducted a public consultation on a “White Paper” published earlier this year. In the White Paper, the Commission had proposed potential measures to monitor and assess the risk of outbound investments.
The results of the consultation are now available and, in the view of the Commission, “cautiously support” the Commission’s proposal. Overall, 52 responses were submitted, 35 of those from businesses/associations and five from academic/research institutions.
The Commission has so far only published what is more of a description of the input it received. But the Commission will refer to “cautiously support[ing]” input for a reason: It can be expected that the regulator will take the feedback as an encouragement to further pursue the idea of screening outbound investments – including into AI.
Offense vs. defense: Players vs. FIFA
The beautiful game and an ugly fight – the conflict between FIFA and the national football leagues and players’ unions has reached a new peak. European Leagues (the association of European Professional Football Leagues) and FIFPRO (a union for football players) earlier this week announced the submission of an antitrust complaint to the Commission. The complaint attacks FIFA’s rules on the international match calendar.
The complainants seem to be driven by two concerns:
- Player welfare: The demanding schedule and travel requirements threaten players’ physical and mental well-being.
- Antitrust: FIFA’s dual role as a regulator and organizer allegedly creates an unfair advantage, violating EU antitrust rules.
Three national players’ unions have also brought a lawsuit against FIFA before the Commercial Court of Brussels directed at the matchday calendar. A particular concern seems to be the newly created Club World Cup, which is to be held in 2025 for the first time, and FIFA unilaterally setting the global matchday calendar, thereby also determining when football clubs and players are to be available and thus automatically determining when competing tournaments like the Super League could take place.
Ultimately, this seems to be another case about the potentially dominant position of a sports federation like FIFA and where the line is to be drawn between the legitimate regulation of a sport in the common interest and an abuse of dominance. We have followed the – politically sometimes hypercharged – world of antitrust and sports for a while (e.g., here, here and here), and it seems we will not be out of news too soon.
All about the extent of regulation
In essence, all three of the above developments are about the extent of regulation: When and how to take antitrust enforcement action in the AI space? Should outbound investments also be screened? How much can FIFA regulate and how much freedom is to be left to leagues and players?
The answers might be different for each topic, and given for different reasons (maybe in the form of a poem?). While there is quite some movement and uncertainty, one thing remains true: Antitrust will not get boring.
Many thanks to Tim Rothenpieler for his support with this post.
Photo by John Barkiple on Unsplash
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