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EC jumps gun with AI and metaverse competition consultations

The European Commission has deemed it necessary to assess the competitive landscape in the nascent metaverse and generative AI markets.

Nick Wood

January 10, 2024

3 Min Read

EVP of competition policy Margrethe Vestager has issued requests for information (RFI) for each one, encouraging interested parties to share their experience of the level of competition, and offer some ideas about how antitrust regulations can help ensure they remain competitive.

The EC is also looking into some of the deals that have been done between big tech firms and genAI developers and providers in order to evaluate their impact on market dynamics. It is also checking to see whether Microsoft's investment in ChatGPT developer OpenAI qualifies for review under EU merger regulations.

According to the Commission, venture capital investment in AI in the EU weighed in at more than €7.2 billion last year, while the size of the European metaverse market – or 'virtual worlds' market as the EU calls it – topped €11 billion.

The EU expects these markets to grow exponentially in the coming years, and are likely to have a significant impact on how businesses compete.

"Virtual worlds and generative AI are rapidly developing. It is fundamental that these new markets stay competitive, and that nothing stands in the way of businesses growing and providing the best and most innovative products to consumers," Vestager said. "We are inviting businesses and experts to tell us about any competition issues that they may perceive in these industries, whilst also closely monitoring AI partnerships to ensure they do not unduly distort market dynamics."

It will be interesting to see the kind of feedback these consultations generate, if only because it is difficult to assess the level of competition in two young markets where the dynamics have the potential to change quite dramatically.

Taking AI first, some of the tech industry's biggest names are still jockeying for position – or competing, if you like – on the merits of their respective offerings. Until last year, Google and IBM were seen as the frontrunners, that is until OpenAI gave them something to worry about. Amazon is getting in on the action too, with its Amazon Q chatbot.

As usual, Apple is happy to let others hog the limelight while it quietly works on AI tech of its own, letting the anticipation build until it is ready to unveil an AI product that it will probably claim is the best ever.

Meanwhile, tech, telecoms and venture capital firms the world over are pouring into the AI market, turning the money hose on anything that could give them an edge.

No one is even close to having this market sewn up yet because the market is still taking shape. There might even be the risk of a bubble, leading to a shake-out once it inevitably bursts.

On that note, the metaverse hype train has ground to a halt after it became apparent that not everyone wants to spend their hard-earned money on a VR headset and spend their limited free time chatting to avatars in Roblox but without the fun.

Facebook parent Meta's metaverse division has lost $46.5 billion since 2019, which Fortune noted in October is more than the turnover of retailer Best Buy, a Fortune 100 company.

The focus on metaverse has shifted from entirely virtual worlds to mixed or augmented reality, a diluted version that blends together the physical with the virtual.

Apple hopes to take a leading role in this evolution with its very expensive Vision Pro headset, which it pitches as a spatial computer that seamlessly blends digital content with physical spaces.

But it's not due to go on sale until early February, which underscores just how young the market still is.

Taking all this into consideration, it is difficult to see how anyone could furnish the Commission with reliable information about genAI or virtual worlds. Interested parties have until 11 March to give it their best shot.

About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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