Microsoft scrutiny in EU as CISPE files for involvement in Germany's competition watchdog probe
The Cloud Infrastructure Services Providers in Europe (CISPE), a trade association mainly comprising European cloud providers, has applied to actively participate in Germany's competition watchdog's investigation into Microsoft's dominance in the country.
The Federal Cartel Office (Bunderskartellamt) had previously considered whether Microsoft's extensive portfolio, covering OSes, productivity software, cloud services, gaming, and social media, posed a threat to market competition.
CISPE had already filed a complaint against Microsoft with the European Union (EU), alleging Azure-related abuses. Now, the group seeks to broaden its involvement in the proceedings in Germany. If approved, CISPE will have access to the file, the ability to comment, and closely track the investigation.
Francisco Mingorance, the Secretary-General at CISPE, expressed concern over Microsoft's licensing practices that unfairly restrict choices and push customers toward its own Azure cloud. The association represents many small and medium-sized enterprises (SMEs) highly dependent on Microsoft's products, making their participation in investigations challenging without the support of associations like CISPE.
Research commissioned by CISPE revealed "surcharges" to use Microsoft software in other providers' clouds, adding up to 28 percent to the software's cost. The group's complaint, filed on behalf of its 24 members, focuses on the increased costs of running Microsoft software in clouds other than Azure and the technical adjustments required for running applications outside Microsoft's public cloud.
In response to these concerns, Microsoft made concessions to licensing in October, but they did not fully address the cloud providers' complaints. A joint complaint by OVHcloud, DCC, and Aruba S.p.A. was settled out of court in March – but the details remain confidential.
Google has also joined the debate, claiming customers are forced to pay Microsoft's licensing "tax" when running software like Office in any other cloud. Google has lodged a complaint against Microsoft with the US Federal Trade Commission (FTC), charging that Azure traps customers.
The European Commission's antitrust team is also approaching a formal probe of a complaint from Slack in 2020 over Microsoft bundling Teams with its dominant Office 365 suite. Nextcloud in Germany has also complained to the EU about Microsoft bundling OneDrive with Windows.
CISPE aims to prevent Microsoft from leveraging its dominant position in adjacent markets for software products and cloud services to strengthen Azure. The association believes an antitrust investigation is crucial to address concerns and ensure fair competition in the cloud services market.
As the investigation progresses, the involvement of CISPE and other parties will shed further light on the potential anticompetitive practices and their impact on the cloud services landscape in Germany and beyond. The outcome of these investigations may have significant implications for Microsoft's business practices and the broader cloud-computing industry in Europe.