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Microsoft Faces a New EU Antitrust Suit Regarding Cloud Computing Methods

Skylar Williams

Nov 09, 2022 15:57

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Amazon is a member of the trade association CISPE, which on Wednesday filed a new antitrust complaint against Microsoft (NASDAQ:MSFT) over its cloud computing operations with European Union antitrust inspectors.


According to CISPE, Microsoft's newly imposed contractual terms and other actions have irreparably destroyed the European cloud computing ecosystem.


Amazon is the cloud computing industry leader, followed by Alphabet (NASDAQ:GOOGL) subsidiaries Google and Microsoft.


"By exploiting its dominance in productivity software, Microsoft restricts alternatives and inflates costs as European customers migrate to the cloud, harming Europe's digital economy," said Francisco Mingorance, secretary general of the CISPE.


In their complaint to the European Commission, CISPE said that the company uses its dominance in productivity software to direct European customers to its Azure cloud infrastructure at the cost of European rivals.


Microsoft was accused of discriminatory product bundling and linking, price discrimination, and technical and competitive customer lock-in.


Microsoft, which has been fined more than €1.6 billion ($1.6 billion) over the previous decade by the European Commission for various antitrust violations, has said in the past that it provides its software to all customers, including competitive cloud service providers.


In the last several years, cloud service providers from Germany, Italy, Denmark, and France, of whom two are members of CISPE, have raised analogous concerns with the Commission.


Microsoft amended licensing agreements and made other changes to make it easier for cloud service providers to compete starting October 1 in an attempt to satisfy EU antitrust concerns.


Rivals Excluded are cloud services from Amazon.com (NASDAQ:AMZN), Alphabet's Google, Alibaba (NYSE:BABA), and Microsoft.


The CISPE said that the EU competition authority should address the issue by applying to Microsoft the principles of fair software licensing set by the trade association the previous year.


It was said that an independent European Observatory may be created to assess the licensing terms of significant software companies.


According to CISPE, the Commission may add a language to the newly passed Digital Markets Act prohibiting cloud computing gatekeepers from preferring their own software applications.

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