For years, I have raised the alarm on the unchecked power of the global digital giants—Amazon, Microsoft, Google, Meta, and others—and the risk this poses to fair competition, innovation, and national sovereignty. I have argued that their dominance is no longer just about search engines, social media, or app stores. It extends deeply into the very infrastructure of the digital economy: cloud computing, artificial intelligence, and the essential services that underpin modern life.
In my previous writings, I have specifically called for bolder regulatory measures, including the possibility of breaking up these digital conglomerates along geographic or functional lines. In the case of Europe, I highlighted that this could allow the EU to reclaim control over its critical ICT infrastructure, fostering fairer competition and greater resilience. These proposals were not driven by ideology, but by a pragmatic assessment of the structural risks posed by the growing concentration of digital power in the hands of a few American tech giants.
The latest Digital Platform Services Inquiry report from the Australian Competition and Consumer Commission (ACCC) now provides further confirmation of these concerns. The ACCC’s final report delivers a stark warning: both the cloud computing and generative AI markets are at significant risk of anti-competitive harm due to the overwhelming market power of Amazon, Microsoft, and Google. Together, these three giants controlled over 81% of Australia’s infrastructure-as-a-service market in 2023, with global cloud revenues from these firms exceeding US$66 billion in a single quarter.
The report highlights how vertical integration, economies of scale, high egress fees, and interoperability barriers create formidable obstacles for any new entrant. The ACCC points to the risk of vertical foreclosure, where these players could bundle, tie, or self-preference their services across the cloud and AI stacks, making it nearly impossible for smaller competitors to gain a foothold.
We are seeing history repeat itself: just as these companies built dominance in search, social media, and digital advertising, they are now leveraging their scale to entrench control over cloud infrastructure and the AI technologies that will define the future. The ACCC notes that large cloud providers are entering partnerships with AI developers in ways that could foreclose rival access to compute resources—the very oxygen needed for AI innovation. And with estimated AI-related expenditure by large platforms set to exceed US$250 billion globally this year, the potential for cross-subsidisation and market distortion is immense.
I welcome the ACCC’s recommendations, including permanent monitoring of these markets and targeted codes of conduct for designated platforms. But as I have written before, these measures will only be effective if regulators are given real teeth—and the political will exists to act decisively. The time for polite consultations and incremental reforms is over. If we are serious about preserving fair competition, fostering local innovation, and protecting consumer rights, we must consider structural solutions, including the break-up or functional separation of these digital giants.
Australia, Europe, and like-minded nations have a unique opportunity—and responsibility—to reshape the digital economy before it is too late. The ACCC’s report is not just a warning; it is a call to action that echoes the very concerns I have raised over the past years. Let us not waste it.
Paul Budde