MS faces antitrust suit; tries to settle by compensating cloud computing group
According to industry representatives, Microsoft is on the verge of a multi-million euro deal with the cloud lobby CISPE to withdraw its competition complaint.
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Microsoft wants to persuade the industry association Cloud Infrastructure Service Providers in Europe (CISPE) to drop the competition complaint it submitted to the EU Commission against the US software company in November 2022 with a suitcase full of several million euros. This was reported by the Politico portal with reference to two industry representatives with knowledge of the offer. This could make it easier for Microsoft to avoid years of antitrust litigation in the EU. However, the CISPE members are said to have not yet agreed to the deal, which could also include separate payments to individual members.
In its submission to the Directorate-General for Competition in Brussels, CISPE has accused Microsoft of exploiting its own dominance in productivity software, limiting choice and driving up costs when European customers want to switch to the cloud. The arguments are not new. For example, the French cloud service provider OVHcloud complained to the Commission back in summer 2021 that Microsoft was abusing its own dominant market position. At the heart of this complaint is the way in which the company markets its products, such as the Office package with Word, Outlook and Excel. The software giant is deliberately creating hurdles so that its programs do not function optimally on competing cloud platforms.
The Italian data center operator Aruba and Slack have also already approached the Commission with similar arguments. Last year, Google also complained that Microsoft was tying customers to its own cloud service Azure with well-known tricks and building artificial walls against competitors. Microsoft promised a remedy in May 2022 following initial complaints. This was to make it easier for competitors on the old continent to host Microsoft's cloud offerings such as MS 365 in their data centers. The company also promised customers in Europe more flexibility in terms of license conditions.
Agreement with gag clause?
EU antitrust watchdogs are scrutinizing Microsoft because, among other things, it combines its Teams video conferencing system with MS 365, potentially giving it an unfair market advantage. The competition watchdogs are now also investigating the larger issue raised by CISPE. However, the Redmond-based company wants to avoid an official antitrust investigation as much as possible: Because the group had not given Windows users a free choice of browsers, it had to pay a fine of half a billion euros in 2013.
As part of an agreement, CISPE and its members are also to promise not to file lawsuits against Microsoft in any country worldwide, according to Politico. The association stated that "discussions with Microsoft are ongoing and proposals have been made". However, no agreement has been reached. Back in February, CISPE emphasized that "all remedies and solutions must be industry-wide and accessible to all cloud customers in Europe". CISPE has 34 members. In addition to European companies such as Leaseweb and Serverplan, these also include the Amazon cloud division AWS, which leads the global market for computer clouds ahead of Microsoft.
Microsoft President Brad Smith will meet EU Competition Commissioner Margrethe Vestager during a visit to Brussels next week. The company emphasized that it continues to work "constructively with CISPE to address the concerns of European cloud providers". The software giant does not wish to comment on the scope and details of a possible agreement at this time.
(bme)
