Microsoft is in new EU antitrust complaint filed by Amazon-associated cloud group CISPE

November 11, 2022

In the middle of its ongoing challenges with its Activision acquisition deal and Copilot issue, Microsoft is facing another problem due to a new EU antitrust complaint on its cloud computing practices, which allegedly affects the European cloud computing ecosystem negatively. Cloud Infrastructure Services Providers in Europe (CISPE), the group which voiced the concern to the European Union antitrust regulators, has different IaaS providers as members, including Amazon Web Services (AWS), the current cloud infrastructure market leader. (via Reuters)

“CISPE members represent the vibrant, autonomous and independent foundations of Europe’s digital transformation and growth. We have filed this sector complaint to rectify the harms suffered by vendors and customers alike as a result of unfair software licensing practices,” said Francisco Mingorance, Secretary General of CISPE. “Leveraging its dominance in productivity software, Microsoft restricts choice and inflates costs as European customers look to move to the cloud, thus distorting Europe’s digital economy. DG Comp must act swiftly to open a formal investigation with a statement of objections against Microsoft’s software licence abuses to defend the robust cloud ecosystem Europe needs and deserves.”

The competition complaint claims that Microsoft is using its productivity software to lead market customers into its Azure cloud infrastructure, “irreparably damaging the European cloud ecosystem and depriving European customers of choice in their cloud deployments.” Aside from this, CISPE also highlighted other supposed anti-competitive practices by Microsoft and “serious unresolved issues.” 

“Recent announcements, blogs and FAQ documents published by Microsoft in an effort to head-off market investigations have not provided the detail, clarity or assurance that it truly intends to bring a swift end to its anti-competitive licensing practices,” CISPE says in a press release.

Moreover, the group stresses the latest issue regarding Microsoft’s new contractual terms that were “unilaterally” enforced on October 1, 2022. Microsoft, nonetheless, said it supports a competitive environment and defended its actions.

“The licensing changes we introduced in October give customers and cloud providers around the world even more options for running and offering our software in the cloud,” a Microsoft spokesperson said.

CISPE detailed some remedies to the EU on how the concerns could be solved, including creating an independent European Observatory that will audit software companies’ software licensing terms. CISPE also pleads EU to apply CISPE’s Control Framework for Fair Software Licensing Principles as a way to evaluate submitted remedies and fair software licensing terms.

“In its complaint, CISPE suggests simple remedies that can be quickly and efficiently implemented across the sector,” CISPE explains. “It sets out an auditable control framework to test compliance with the Ten Principles of Fair Software Licensing. The Ten Principles, devised and launched with Cigref, the French association of leading digital customers, in 2021, have since been endorsed by multiple vendor and customer associations across Europe and beyond. They represent a fair and equitable set of best practices that ensure the software licenses of any dominant software vendor cannot be used to self-preference, discriminate or otherwise lock-in customers to their own cloud ecosystems.”

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