European regulators raise questions about Microsoft cloud practices

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BLOOMBERG (BRUSSELS) – European regulators are seeking information from Microsoft’s partners and competitors in response to a complaint alleging anti-competitive behaviour in the cloud computing services market.

The European Commission sent out a questionnaire in March that focused on how Microsoft licences its goods, according to Bloomberg News. The queries might lead to a formal investigation, and they come after OVH and two other cloud providers filed an antitrust complaint against Microsoft last year with the European Union’s antitrust agency.

The survey asks if they’ve signed agreements to be a part of Microsoft programmes that allow other partners and cloud providers to market Microsoft products, as well as whether the corporation is making it tougher or more expensive to operate certain of its programmes on competitor cloud providers’ networks.

“We can confirm that the commission has received the complaint,” a European Commission press official stated. “At this time, we are unable to give any further information regarding this.”

Microsoft, the creator of market-leading Office and Windows software, is also the world’s second-largest cloud infrastructure provider, renting processing power and storage to clients through the Internet. Amazon.com is the main provider of these services, and Alphabet’s Google is attempting to catch up.

OVH and others claim that Microsoft’s software licencing terms put them at a disadvantage for running Microsoft products and make it easier or cheaper to pair things like Windows, Office, and Windows Server with Microsoft’s own Azure cloud as companies increasingly mix and match programmes from vendors or use multiple clouds.

In an emailed response, Microsoft stated, “The cloud industry is booming, and European cloud companies have created successful business models leveraging Microsoft software and services.” “We’re constantly reviewing how we can effectively serve partners and make Microsoft products available to consumers across all settings, including those of other cloud providers,” says the Microsoft spokesperson.

Microsoft has generally avoided the worldwide antitrust inquiry that other significant internet companies, such as Meta Platforms, Apple, Google, and Amazon, have been subjected to. However, the EU reached an agreement last month on a new law that allows for multibillion-euro penalties and acquisition bans for the biggest violators of the new Digital Markets Act. The laws are aimed at so-called “gatekeeper” corporations that have a monopoly on distribution in their markets. Microsoft is one of them.

The FOIA request seeks information on whether Microsoft’s cloud-based Windows and Office products can function on rivals’ cloud platforms, and if so, if Microsoft would need to “make technological adjustments” to do so. It also asks if the responder believes that “in order to compete successfully,” it has to integrate specific Microsoft products or services in its own cloud infrastructure offering.

The firms were also requested to compare the software licence terms offered to their clients with those offered by Microsoft to its own customers under the Azure Hybrid Benefit Program. It offers clients a discount if they choose Azure instead of another cloud provider to operate certain Microsoft products, such as Windows Server.

The deadline for firms to reply to the questionnaire is April 7. According to Mr Richard Pepper, partner at Macfarlanes LLP, the questionnaire is most certainly part of the commission’s early fact-finding process. “At this point, it’s too early to say whether or not this will be implemented. Nonetheless, the commission will be concentrating its efforts in this area.”

Microsoft has previously been embroiled in antitrust battles with the European Union, which concluded in 2009 with the corporation agreeing to provide Windows customers a choice of Web browsers.

Prior to that date, the Redmond, Washington-based software company paid out 1.68 billion euros in files related to EU antitrust investigations.

European regulators raise questions about Microsoft cloud practices

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