Microsoft offers to change cloud licensing practices to avoid EU antitrust probe, says report

Microsoft offers to change cloud licensing practices to avoid EU antitrust probe, says report

After European cloud vendors filed a formal complaint with the European Commission in 2022, Microsoft is reportedly seeking to reach an agreement before an investigation is launched.

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Microsoft has reportedly agreed to change its cloud computing practices in order to avoid an antitrust probe from the European Commission, the EU’s antitrust authority.

The potential probe relates to complaints made by European cloud companies including Aruba, OVHcloud, Danish Cloud Community and the Association of Cloud Infrastructure Service Providers (CISPE) about changes Microsoft first made to the terms of its outsourcing license agreement in 2019, and then modified again in 2022.

The cloud vendors raised concerns after their customers were asked to pay more to run Microsoft software in non-Microsoft cloud environments, under what they saw as restrictive cloud licensing policies.

As a result of these licensing changes, on November 9, 2022, CISPE filed a formal complaint with the European Commission’s Directorate-General for Competition (DG Comp) stating: “Microsoft uses its dominance in productivity software to direct European customers to its own Azure cloud infrastructure to the detriment of European cloud infrastructure providers and users of IT services.”

Now, in order to avoid another antitrust probe by the EU Commission, Microsoft has offered to change its cloud computing practices to settle antitrust complaints filed by smaller rivals, a person with direct knowledge of the matter told Reuters.

The European Commission refused to comment on the news, while Aruba, CISPE, the Danish Cloud Community, and OVHcloud did not respond to requests for comment.

CISPE plans to pursue its complaint. A spokesperson for CISPE told Reuters, “We’ve had an initial discussion with Microsoft, but have not seen anything that suggests changes that will ensure that all European customers have the chance to run the software they want in the cloud of their choice free of unfair licence terms or discriminatory pricing.”

A Microsoft spokesperson would not discuss with Computerworld whether a deal had been reached with any of the complainants. “In October 2022, we introduced changes to our licensing practices that address the feedback that we heard from European cloud providers. We are grateful for the productive conversations that led us there and appreciate the feedback that we have received since. We are committed to the European Cloud Community and their success,” the Microsoft spokesperson said.

Microsoft is no stranger to the EU Commission’s antitrust rulings. In 2004 the company paid a $611 million fine after it was found it guilty of illegally bundling media player software with Windows XP. An additional $731 million fine was levelled against the company in 2013 for bundling its Internet Explorer browser with Windows 7.

Microsoft’s proposed acquisition of games studio Activision Blizzard is also currently under scrutiny by the EU Commission, as well as the Competition Market Authorities (CMA) in the UK and the Federal Trade Commission (FTC) in the US.

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