A coalition of EU companies, led by file hosting company Nextcloud, has filed a complaint with the EU as well as the German anti-trust authorities, claiming Microsoft is abusing its dominant position in operating systems to expand into unrelated areas such as collaboration and cloud services.
They claim Microsoft is integrating “Microsoft 365” deeper and deeper into their wider service and software portfolio, including Windows, saying Microsoft’s “OneDrive” is privileged as a choice within Windows’ operation whenever Windows users deal with file storage. Another example is Microsoft’s “Teams” which is being pushed successfully into the market as a default part of Windows 11.
They claim that Microsoft’s combination of the dominant Windows (operating software) with the OneDrive (cloud) offering makes it nearly impossible to compete with their SaaS services. It illustrates anti-competitive practices such as “self-preferencing” on the basis of the market dominance of Windows.
The effect has been that when it comes to cloud storage, over the last years, Microsoft, Google and Amazon have grown their market shares to 66% of the total European market, with local (European) providers declining from 26% to 16%.
They claim behavior as described above is at the core of this dramatic level of growth of the global tech giants in Europe, and is very similar to what happened in the late 90s when Microsoft bundled Internet Explorer with Windows thereby destroying Netscape.
Frank Karlitschek, Nextloud’s CEO and founder, said:
This is quite similar to what Microsoft did when it killed the competition in the browser market, stopping nearly all browser innovations for over a decade. Copy an innovators’ product, bundle it with your own dominant product, and kill their business, then stop innovating. This kind of behavior is bad for the consumer, for the market, and, of course, for local businesses in the EU. Together with the other members of the coalition, we are asking the antitrust authorities in Europe to enforce a level playing field, giving customers a free choice and giving the competition a fair chance.
NextCloud and their “Coalition for a Level Playing Field” say these deliberate abusive practice needs to be addressed without delay. They are demanding:
- No abuse of Microsoft’s dominant position in the OS and related markets (e.g. by bundling, pre-installing, or leveraging additional Microsoft services) while preserving a level playing field.
- And that Microsoft must support open standards and interoperability. This would give European consumers a free choice among service offerings that should compete fairly on their merits.
Microsoft is being increasingly targeted in the European Union, with the company facing another challenge by Slack in the EU currently.
Given that cloud and operating system integration is now the norm when it comes to major platforms such as Android, iOS and of course Windows, do our readers think NextCloud has a point, or are they stuck in the past? Let us know below.