Insights Competition in virtual worlds and generative AI: EU Commission calls for contribution


On 9 January 2024, the European Commission launched a call for input on the competition issues raised by virtual worlds and generative AI. The press release states that digital markets can be fast moving and innovative, but they may also present certain characteristics (network effects, lack of multi-homing, “tipping”) which can result in entrenched market positions and potentially harmful behaviour that is difficult to address afterwards. As such, the Commission should engage in a forward-looking analysis of technology and market trends to identify potential competition issues that may arise in these areas.

The Commission describes virtual worlds as persistent, immersive environments, based on technologies including 3D and extended reality (XR), which make it possible to blend physical and digital worlds in real-time, for a variety of purposes such as designing, making simulations, collaborating, learning, socialising, carrying out transactions or providing entertainment. The non-exhaustive list of issues on which the Commission is seeking input in relation to virtual worlds include the barriers to entry, the drivers of competition (e.g. access to data, own hardware or infrastructure, IP rights, control over connectivity, vertical integration, platform and payment fees), current key players, potential new entrants, and monetisation models.

Generative AI is defined by the Commission as an AI system that generates, in response to a user prompt, synthetic audio, image, video or text content, for a wide range of possible uses, and which can be applied to many different tasks in various fields. The non-exhaustive list of issues on which the Commission is seeking input in relation to generative AI include the main components (i.e. inputs) necessary to build, train, deploy and distribute AI, barriers to entry, drivers of competition, monetisation models, open source versus proprietary AI, the role of data, and interoperability.

The Commission also asks what competition issues are likely to emerge for these technologies and whether they will trigger a need to adapt EU legal antitrust concepts or investigation tools and practices.

The press release states the Commission may organise a workshop in the second quarter of 2024 to bring together the different perspectives emerging from the contributions.

For more information and to respond to the Call, which closes on 11 March 2024, click here and here.