‘Fair practices’ by digital tech suppliers shouldn’t stop when the contract is signed
The role of digital technologies in the operations of all kinds of organisations can no longer be ignored. And while these services provide important economic and social benefits, the negative side of supplier behaviour cannot be ignored by the authorities, including the European Commission.
Beltug, as well as its sister organisations Cigref (France), CIO Platform (Netherlands) and Voice (Germany), have been encouraging the European Commission to not only consider competition between suppliers, but to look into supplier behaviours after the choice of supplier/solution has been made and the contracts signed.
Two recent Consultations to which we have responded include Digital Services Act and the need for a new competition tool.
23 / 09 / 20
Challenges to digital growth from supplier behaviour
In our responses to these consultations, we address several issues that will hamper the digital economic growth of Europe if they are not solved now. Some of the situations facing our members include:
- Complex contract and licensing conditions that put the customer in an unequal position vis-à-vis the suppler. After all, the supplier only needs to deal with one contract (its own), but the customer has to understand many!
- Unilateral changes to agreements and to Terms and Conditions by the supplier, which can lead to higher costs without added benefits.
- Re-bundling of applications by suppliers, requiring the customer to purchase additional licences to keep accessing the services or solutions it has been using.
- The resulting risk of non-compliance putting added pressure on the customer to purchase even more licences, or to buy more solutions from the same supplier, which increases dependence and lock-in
- Use of the customer’s data by the supplier; and a high cost for retrieving the customer’s own data from the cloud.
- The need to negotiate compliance with legal requirements as part of the contract discussions.
- Limited operability between software solutions, and customisation of software for a customer’s specific situation that pushes the use of the same supplier in other parts of the company.
- Wide-ranging costs to switch to another system or supplier is costly, including new licences, training, conversion of data/algorithms, starting over with AI learning, etc.
- New, interesting alternatives that are quickly bought out by the ‘big players’, further reducing the true choices for the customers. This makes it nearly impossible to avoid the incumbents.
Beltug, and our sister associations, call on the European Commission to act in the same way towards suppliers who abuse their power in the customer relationships, as it would against a monopoly. This is vital for ensuring that the benefits of digital technology will be felt not only by the companies themselves, but by the economies overall.
You can read the letter sent by Beltug, Cigref, CIO Platform and Voice on the needs for a new competition tool here.