Table of Contents
Introduction
Six months after the European non-profit trade association Cloud Infrastructure Services Providers in Europe (CISPE) filed an antitrust complaint against Microsoft for allegedly using its dominant position in business software to tether customers to its Azure cloud platform, Microsoft has begun settlement discussions with CISPE.
This comes just over a month after it was reported that Microsoft was nearing a settlement of a related case with three European cloud organizations: France’s OVHcloud, Italy’s Aruba, and Denmark’s industry group Danish Cloud Community.
What Were The Allegations About?
In March of this year, the three companies filed a complaint with the European Commission (EC) against Microsoft’s anticompetitive practices. They claimed that Microsoft increased the cost of running its software on competing cloud platforms compared to its Azure platform, making it more technically challenging to run particular applications.
Even though both OVHcloud and Aruba are members of CISPE, the organization decided to pursue an antitrust case against Microsoft on its own rather than joining existing ones, citing a desire to “give a voice to those participants without the means to file their grievances, or for whom the fear of revenge is too great to take risks waiting alone.”
It’s important to remember that AWS, Amazon’s cloud computing arm, is also a CISPE member. This is not as much of a David vs. Goliath struggle as it looks at first.
Whatever the case, CISPE acknowledged today that Microsoft has contacted it with an “outline settlement agreement” and that its member businesses have begun discussions to “return equal competition to the European cloud infrastructure sector.”
Indicators of Danger
At this time, details are sketchy at best; all CISPE has said is that Microsoft has made some ideas about its license conditions. However, the group emphasizes that Microsoft must first address “several red lines” before a settlement can be achieved. For instance, it said that any finalized agreement must apply to all European cloud infrastructure providers and clients and must be structured to hold Microsoft liable for whatever obligations it makes in the distant future.
“Any company has to have the ability to run any program they licensed on the cloud of their option, without monetary or technical penalties,” CISPE says. Additionally, “[and] any agreement must be readily apparent and clear, subject to scrutiny, future-proof, and transparent for compliance over time.”
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Microsoft In Hot Water Over Its Cloud Policies
No matter what happens with Microsoft and CISPE’s settlement, the company’s cloud policies will continue to draw criticism from many places. Recently, Google has criticized Microsoft’s planned settlement with OVHcloud, Aruba, and the Danish Cloud Community, charging Microsoft with antitrust activities and implying that a deal with smaller cloud competitors could not be in Google’s favor.
Meanwhile, the United Kingdom is getting ready to look into the local cloud infrastructure industry, focusing on Amazon and Microsoft’s business methods in particular. Regulatory agency Ofcom has highlighted activities that make it more difficult for firms to transfer between cloud providers or even adopt a hybrid strategy.
The European Union’s CISPE says there is “still a long way to go” before any agreements are made, and “several important issues” must be resolved.
CISPE stated, “Our stakeholders are examining the suggested alterations and agreement on settlement and will send feedback to Microsoft in the coming days, particularly on important components that must be addressed to solve sector-wide issues.”
Conclusion
Microsoft’s settlement discussions with CISPE mark an important development in the ongoing scrutiny of the company’s cloud practices in Europe. While the settlement offers a potential resolution to the allegations of anticompetitive behavior, it’s clear that there are several key issues still to be addressed. These include ensuring equal competition for all cloud providers, transparency in Microsoft’s future obligations, and eliminating any technical or monetary penalties that may restrict choice for consumers. With CISPE’s concerns and the broader regulatory environment in the UK and EU, Microsoft’s cloud policies are set to remain under close watch, and the outcome of these negotiations could shape the future of cloud competition in Europe.
FAQs
- What is the complaint against Microsoft about?
- The complaint alleges that Microsoft used its dominant position in business software to make it more difficult and expensive for customers to use competing cloud services, especially compared to its own Azure platform.
- Which organizations are involved in the settlement talks?
- Microsoft is in settlement discussions with CISPE, which includes members such as OVHcloud, Aruba, and the Danish Cloud Community, as well as other European cloud infrastructure providers.
- What are the key demands from CISPE in the settlement?
- CISPE demands that any settlement should apply to all European cloud infrastructure providers, be transparent, and hold Microsoft accountable for its commitments. The agreement must ensure that companies can run any program they’ve licensed on the cloud of their choice without financial or technical penalties.
- What other regulatory bodies are investigating Microsoft’s cloud policies?
- Google has criticized Microsoft’s settlement with smaller cloud providers. In addition, the UK’s Ofcom is preparing to investigate Amazon and Microsoft’s business methods in the local cloud infrastructure industry.
- What happens next in the settlement process?
- CISPE is reviewing the proposed changes and will provide feedback to Microsoft in the coming days. Significant issues still need to be resolved before a final settlement is reached.
