fix: babel config lookup

README.md

@@ -351,7 +351,9 @@ Just remember to configure your `netlify.toml` to point to the `Next.js` build f
 
 ## Webpack Configuration
 
-By default the webpack configuration uses `babel-loader` to load all js files. Any `.babelrc` in the directory `netlify-lambda` is run from will be respected. If no `.babelrc` is found, a [few basic settings are used](https://github.com/netlify/netlify-lambda/blob/master/lib/build.js#L11-L15a).
+By default the webpack configuration uses `babel-loader` to load all js files. 
+`netlify-lambda` will search for [a valid babel config file](https://babeljs.io/docs/en/config-files) in the functions directory first and look upwards up to the directory `netlify-lambda` is run from (similar to how `babel-loader` looks for a Babel config file). 
+If no babel config file is found, a [few basic settings are used](https://github.com/netlify/netlify-lambda/blob/master/lib/build.js#L11-L15a).
 
 If you need to use additional webpack modules or loaders, you can specify an additional webpack config with the `-c`/`--config` option when running either `serve` or `build`.
 
@@ -383,7 +385,7 @@ The additional webpack config will be merged into the default config via [webpac
 
 The default webpack configuration uses `babel-loader` with a [few basic settings](https://github.com/netlify/netlify-lambda/blob/master/lib/build.js#L19-L33).
 
-However, if any `.babelrc` is found in the directory `netlify-lambda` is run from, or [folders above it](https://github.com/netlify/netlify-lambda/pull/92) (useful for monorepos), it will be used instead of the default one.
+However, if any valid Babel config file is found in the directory `netlify-lambda` is run from, or [folders above it](https://github.com/netlify/netlify-lambda/pull/92) (useful for monorepos), it will be used instead of the default one.
 
 It is possible to disable this behaviour by passing `--babelrc false`.
 
@@ -401,7 +403,7 @@ npm install --save-dev @babel/preset-typescript
 
 You may also want to add `typescript @types/node @types/aws-lambda`.
 
-2. Create a custom `.babelrc` file:
+2. Create a Babel config file, e.g. `.babelrc`:
 
 ```diff
 {
@@ -465,7 +467,7 @@ If you need an escape hatch and are building your lambda in some way that is inc
 
 Defaults to `true`
 
-Use a `.babelrc` found in the directory `netlify-lambda` is run from. This can be useful when you have conflicting babel-presets, more info [here](#babel-configuration)
+Use a Babel config file found in the directory `netlify-lambda` is run from. This can be useful when you have conflicting babel-presets, more info [here](#babel-configuration)
 
 ## Netlify Identity
 

lib/build.js

@@ -3,6 +3,32 @@ var path = require('path');
 var conf = require('./config');
 var webpack = require('webpack');
 var merge = require('webpack-merge');
+const findUp = require('find-up');
+
+/*
+ * Possible babel files were taken from
+ * https://github.com/babel/babel/blob/master/packages/babel-core/src/config/files/configuration.js#L24
+ */
+
+const BABEL_ROOT_CONFIG_FILENAMES = [
+  'babel.config.js',
+  'babel.config.cjs',
+  'babel.config.mjs',
+  'babel.config.json',
+];
+
+const BABEL_RELATIVE_CONFIG_FILENAMES = [
+  '.babelrc',
+  '.babelrc.js',
+  '.babelrc.cjs',
+  '.babelrc.mjs',
+  '.babelrc.json',
+];
+
+const BABEL_CONFIG_FILENAMES = [
+  ...BABEL_ROOT_CONFIG_FILENAMES,
+  ...BABEL_RELATIVE_CONFIG_FILENAMES,
+];
 
 const testFilePattern = '\\.(test|spec)\\.?';
 
@@ -15,25 +41,52 @@ function getBabelTarget(envConfig) {
   return unknown ? '8.15.0' : current.replace(/^nodejs/, '');
 }
 
-function haveBabelrc(functionsDir) {
-  const cwd = process.cwd();
+function getRepositoryRoot(functionsDir, cwd) {
+  const gitDirectory = findUp.sync('.git', {
+    cwd: functionsDir,
+    type: 'directory',
+  });
+  if (gitDirectory === undefined) {
+    return cwd;
+  }
 
-  return (
-    fs.existsSync(path.join(cwd, '.babelrc')) ||
-    functionsDir.split('/').some((dir) => {
-      const indexOf = functionsDir.indexOf(dir);
-      const dirToSearch = functionsDir.substr(0, indexOf);
+  return path.dirname(gitDirectory);
+}
 
-      return fs.existsSync(path.join(cwd, dirToSearch, '.babelrc'));
-    })
+function existsBabelConfig(functionsDir, cwd) {
+  const repositoryRoot = getRepositoryRoot(functionsDir, cwd);
+  const babelConfigFile = findUp.sync(
+    (dir) => {
+      const babelConfigFile = BABEL_CONFIG_FILENAMES.find(
+        (babelConfigFilename) =>
+          findUp.sync.exists(path.join(dir, babelConfigFilename)),
+      );
+      if (babelConfigFile) {
+        return path.join(dir, babelConfigFile);
+      }
+      // Don't search higher than the repository root
+      if (dir === repositoryRoot) {
+        return findUp.stop;
+      }
+      return undefined;
+    },
+    {
+      cwd: functionsDir,
+    },
   );
+  return Boolean(babelConfigFile);
 }
 
-function webpackConfig(dir, { userWebpackConfig, useBabelrc } = {}) {
+function webpackConfig(
+  dir,
+  { userWebpackConfig, useBabelrc, cwd = process.cwd() } = {},
+) {
   var config = conf.load();
   var envConfig = conf.loadContext(config).environment;
   var babelOpts = { cacheDirectory: true };
-  if (!haveBabelrc(dir)) {
+
+  var dirPath = path.resolve(path.join(cwd, dir));
+  if (!existsBabelConfig(dirPath, cwd)) {
     babelOpts.presets = [
       [
         require.resolve('@babel/preset-env'),
@@ -49,8 +102,7 @@ function webpackConfig(dir, { userWebpackConfig, useBabelrc } = {}) {
   }
 
   var functionsDir = config.build.functions || config.build.Functions;
-  var functionsPath = path.resolve(path.join(process.cwd(), functionsDir));
-  var dirPath = path.resolve(path.join(process.cwd(), dir));
+  var functionsPath = path.resolve(path.join(cwd, functionsDir));
 
   if (dirPath === functionsPath) {
     throw new Error(
@@ -140,10 +192,7 @@ function webpackConfig(dir, { userWebpackConfig, useBabelrc } = {}) {
     );
   }
   if (userWebpackConfig) {
-    var webpackAdditional = require(path.join(
-      process.cwd(),
-      userWebpackConfig,
-    ));
+    var webpackAdditional = require(path.join(cwd, userWebpackConfig));
 
     return merge.smart(webpackConfig, webpackAdditional);
   }

lib/build.spec.js

@@ -1,6 +1,8 @@
+const util = require('util');
 const fs = require('fs');
 const path = require('path');
-const rimraf = require('rimraf');
+const rimraf = util.promisify(require('rimraf'));
+const tempy = require('tempy');
 const build = require('./build');
 
 jest.mock('./config', () => {
@@ -16,26 +18,62 @@ jest.mock('./config', () => {
 const buildTemp = path.join('.temp', 'build');
 const functions = path.join(buildTemp, 'functions');
 
-const setupFunction = (script, filename) => {
-  fs.mkdirSync(functions, { recursive: true });
-  fs.writeFileSync(path.join(functions, filename), script);
+const mkdir = util.promisify(fs.mkdir);
+const pWriteFile = util.promisify(fs.writeFile);
+
+const writeFile = async (fullPath, content) => {
+  await mkdir(path.dirname(fullPath), { recursive: true });
+  await pWriteFile(fullPath, content);
+};
+
+const writeFileInBuild = async (content, file) => {
+  const fullPath = `${buildTemp}/${file}`;
+  await writeFile(fullPath, content);
+  return fullPath;
+};
+
+const writeFileInFunctions = async (content, file) => {
+  const fullPath = `${functions}/${file}`;
+  await writeFile(fullPath, content);
+  return fullPath;
+};
+
+const findBabelLoaderRule = (rules) =>
+  rules.find((rule) => rule.use.loader.includes('babel-loader'));
+
+const validateNotDetectedBabelConfig = (stats) => {
+  const babelLoaderRuleOptions = findBabelLoaderRule(
+    stats.compilation.options.module.rules,
+  ).use.options;
+
+  expect(babelLoaderRuleOptions.presets).toBeDefined();
+  expect(babelLoaderRuleOptions.plugins).toBeDefined();
+};
+
+const validateDetectedBabelConfig = (stats) => {
+  const babelLoaderRuleOptions = findBabelLoaderRule(
+    stats.compilation.options.module.rules,
+  ).use.options;
+
+  expect(babelLoaderRuleOptions.presets).toBeUndefined();
+  expect(babelLoaderRuleOptions.plugins).toBeUndefined();
 };
 
 describe('build', () => {
   const functionsBuildOutputDir = require('./config').load().build.functions;
 
-  beforeEach(() => {
-    fs.mkdirSync(buildTemp, { recursive: true });
+  beforeEach(async () => {
+    await mkdir(buildTemp, { recursive: true });
   });
 
-  afterEach(() => {
-    rimraf.sync(buildTemp);
+  afterEach(async () => {
+    await rimraf(buildTemp);
   });
 
   describe('run', () => {
     it('should return webpack stats on successful build', async () => {
       const script = `module.exports = () => console.log("hello world")`;
-      setupFunction(script, 'index.js');
+      await writeFileInFunctions(script, 'index.js');
 
       const stats = await build.run(functions);
       expect(stats.compilation.errors).toHaveLength(0);
@@ -46,7 +84,7 @@ describe('build', () => {
 
     it('should throw error on complication errors', async () => {
       const script = `module.exports = () => console.log("hello`;
-      setupFunction(script, 'index.js');
+      await writeFileInFunctions(script, 'index.js');
 
       expect.assertions(1);
 
@@ -55,7 +93,7 @@ describe('build', () => {
 
     it('should throw error on invalid config', async () => {
       const script = `module.exports = () => console.log("hello world")`;
-      setupFunction(script, 'index.js');
+      await writeFileInFunctions(script, 'index.js');
 
       expect.assertions(1);
 
@@ -68,13 +106,13 @@ describe('build', () => {
 
     it('should merge webpack custom config', async () => {
       const script = `module.exports = () => console.log("hello world")`;
-      setupFunction(script, 'index.js');
+      await writeFileInFunctions(script, 'index.js');
 
       const webpackConfig = `module.exports = { resolve: { extensions: ['.custom'] } }`;
-      const customWebpackConfigDir = path.join(buildTemp, 'webpack');
-      const userWebpackConfig = path.join(customWebpackConfigDir, 'webpack.js');
-      fs.mkdirSync(customWebpackConfigDir, { recursive: true });
-      fs.writeFileSync(userWebpackConfig, webpackConfig);
+      const userWebpackConfig = await writeFileInBuild(
+        webpackConfig,
+        'webpack/webpack.js',
+      );
 
       const stats = await build.run(functions, {
         userWebpackConfig,
@@ -89,5 +127,71 @@ describe('build', () => {
         '.custom',
       ]);
     });
+
+    describe('babel config file resolution', () => {
+      it('should alter the default babelOpts when no valid babel config file is found', async () => {
+        await writeFileInFunctions('', 'not-babel.config.js');
+
+        const stats = await build.run(functions);
+
+        validateNotDetectedBabelConfig(stats);
+      });
+
+      it('should not alter the default babelOpts when a valid babel config file is found in same directory as the functions directory', async () => {
+        await writeFileInFunctions('', 'babel.config.js');
+
+        const stats = await build.run(functions);
+
+        validateDetectedBabelConfig(stats);
+      });
+
+      it('should not alter the default babelOpts when a valid babel config is found in directory above the functions directory', async () => {
+        const [, fullPath] = await Promise.all([
+          writeFileInFunctions('', 'babel.config.js'),
+          writeFileInFunctions('', `sub-dir/index.js`),
+        ]);
+
+        const stats = await build.run(path.dirname(fullPath));
+
+        validateDetectedBabelConfig(stats);
+      });
+
+      it('should not alter the default babelOpts when a valid babel config is found in a monorepo', async () => {
+        const stats = await tempy.directory.task(async (directory) => {
+          await Promise.all([
+            writeFile(`${directory}/.git/HEAD`, ''),
+            writeFile(
+              `${directory}/packages/netlify-site/functions/index.js`,
+              'module.exports = () => console.log("hello world")',
+            ),
+            writeFile(`${directory}/babel.config.js`, ''),
+          ]);
+
+          return await build.run(`packages/netlify-site/functions`, {
+            cwd: directory,
+          });
+        });
+
+        validateDetectedBabelConfig(stats);
+      });
+
+      it('should not alter the default babelOpts when a valid babel config is found in a non git project', async () => {
+        const stats = await tempy.directory.task(async (directory) => {
+          await Promise.all([
+            writeFile(
+              `${directory}/packages/netlify-site/functions/index.js`,
+              'module.exports = () => console.log("hello world")',
+            ),
+            writeFile(`${directory}/babel.config.js`, ''),
+          ]);
+
+          return await build.run(`packages/netlify-site/functions`, {
+            cwd: directory,
+          });
+        });
+
+        validateDetectedBabelConfig(stats);
+      });
+    });
   });
 });