The UK Markets Authority warns against big technology companies taking over the artificial intelligence market

The head of the UK Competition and Markets Authority, Sarah Cardell, said in a speech that the regulator would not repeat the laissez-faire approach that has characterized its approach to digital markets over the past decade.

“Could we have responded more quickly to the competitive threats posed by large digital platforms, recognizing earlier that the tools we had would need to adapt to meet the unique challenges posed by this new type of business? With the benefit of hindsight, I think the answer is… Almost certainly yes,” she told an audience in Washington, D.C.

The same patterns of “incumbent companies leveraging their core market power to thwart new entrants” are again present in the emerging AI market, Cardell said.

She pointed to a paper published by the CMA that day which concluded that Google, Amazon, Microsoft, Meta and Apple – collectively called GAMMA companies – represented a presence up and down the foundational model value chain, raising the specter of greater levels of vertical integration.

Four companies with a significant presence in providing computing or data resources – Amazon, Google, Meta, and Microsoft – can restrict access to important inputs. The report notes that incumbents in consumer- or corporate-facing markets can distort choices and restrict competition in spreading the constitutive model.

In addition to vertical integration, the regulator issued a warning about the proliferation of strategic partnerships and investments, identifying an “interconnected network” of more than 90 companies that includes GAMMA companies as well as chip designer Nvidia.

While partnerships can help independent developers and increase competition, “we are also vigilant against the possibility that incumbents will attempt to use partnerships and investments to suppress competitive threats, even when it is uncertain whether those threats will materialize,” the report says.

A Microsoft spokesperson said that the company welcomes the “clarity and transparency provided by the report,” and that the company looks forward to engaging constructively with the UK Capital Markets Authority.

The report comes after some British lawmakers warned the competition regulator of the potential risks arising from a small number of the largest technology companies influencing policy developments in the country using their products to power smaller market monopoly models (see: The UK government has warned of a regulatory takeover of artificial intelligence by big tech companies).