Microsoft, a leading tech company in the US and beyond, has found an escape route from the European Union, EU’s investigation into antitrust complaints levelled against its cloud computing licensing practices by Cloud services organisation CISPE and a group of small EU cloud providers.
The American tech company owned by one of the world’s richest men, Jeff Bezos is wading off the regulators by receiving a 20-million-euro ($21.7 million) deal that requires it to develop a product allowing CISPE’s members to run its software on their platforms on Microsoft’s Azure cloud infrastructure with prices equivalent to Microsoft’s prices.
The United States’ tech giant which ranks behind market leader Amazon ranks just before Google. It would have been subjected to huge fines if the EU’s investigation found it guilty of the charges despite antitrust scrutiny on both sides of the Atlantic.
In late 2022, the complainants had reported to the European Commission alleging that contractual terms imposed by Microsoft on October 1 were harming Europe’s cloud computing ecosystem that worth billions of dollars in the EU.
In a statement, Microsoft President Brad Smith said, “after working with CISPE and its European members for more than a year, I am pleased that we’ve not only resolved their concerns of the past, but also worked together to define a path forward that brings even more competition to the cloud computing market in Europe and beyond.”
This, however, came after the cloud service organisation, CISPE gave Microsoft nine months to develop and complete a product that will allow its members to run Microsoft software on their platforms, adding that the US tech giant will also compensate CISPE members for lost revenues related to their licensing costs over the last two years.
Although no financial figures have been disclosed by either party, it was gathered that Microsoft has offered about 20 million euros in total, excluding Amazon Web Services (AWS), Google Cloud Platform and AliCloud. This also gave rise to another round of criticism from the first two companies.
Speaking with newsmen, an AWS spokesperson reportedly said, “we continue to stand with the growing number of customers, providers and regulators globally who are calling on Microsoft to end its discriminatory practices for all customers.”
On his part, the head of Google Cloud, Amit Zavery expressed hope that regulators elsewhere would continue to look into Microsoft’s licensing practices while CISPE said it would now withdraw its EU complaint and would not start or support complaints on these issues in Europe and elsewhere if the products are duly executed as agreed.
According to Zavery, “many regulatory bodies have opened inquiries into Microsoft’s licensing practices, and we are hopeful there will be remedies to protect the cloud market from Microsoft’s anti-competitive behaviour.
He added that, “we are exploring our options to continue to fight against Microsoft’s anti-competitive licensing in order to promote choice, innovation, and the growth of the digital economy in Europe.”
On their part, CISPE, through its Secretary General Francisco Mingorance said, “this agreement will provide a level playing field for European cloud infrastructure service providers and their customers.”
