Antitrust clouds continue to gather over Microsoft's European business

Regional trade group applies to partake in Germany's probe of Redmond's cloud software policies

A trade association of mostly European cloud providers and Amazon Web Services has filed an application to "actively participate" in a probe by Germany's competition watchdog to examine the dominance of Microsoft.

The Bunderskartellamt – Federal Cartel Office – announced in March it was considering whether Microsoft posed a threat to other businesses in the country's digital ecosystem. It highlighted that Microsoft's portfolio spans OSes, productivity software, cloud services, gaming, social media and more.

"In light of this, there are good reasons to examine whether Microsoft is of paramount significance for competition across markets. Such a finding would allow us to take action at an early stage and prohibit possible anti-competitive practices," it told us at the time.

Now the Cloud Infrastructure Services Providers in Europe (CISPE) trade group – which has already filed a complaint against Microsoft with the EU for alleged abuses relating to Azure – is broadening the fight to get involved with affairs in Germany. If the application is approved, CISPE can ask for access to the file, comment, and more closely track the proceedings.

"It is high time to investigate Microsoft's abuse in licensing its essential software for businesses to unfairly restrict choice and steer customers to its own Azure cloud," said Francisco Mingorance, Secretary General at CISPE.

"Relying on the goodwill, voluntary or secret arrangements and unenforceable concessions of a dominant gatekeeper will not end these unfair practices," he added. "We can provide significant data and insight to the Federal Cartel Office in this matter and hope to be accepted as an official third party in its vital investigation. The role of associations such as CISPE is especially important since we represent many SMEs whose dependence on Microsoft is such that they dare not participate in such investigations unilaterally."

Research commissioned by CIPSE found "surcharges" to use Microsoft wares in other providers' clouds added as much as 28 percent to the cost of the software.

CISPE's own competition complaint filed in November on behalf of its 24 members centered on the increased costs of buying and running Microsoft software in clouds other than Azure, as well as the technical adjustments needed to run some applications outside of Microsoft's public cloud.

This came after Microsoft made concessions to licensing in October, many of which didn't specifically answer the concerns tabled by multiple cloud providers. A joint complaint by OVHcloud, DCC and Aruba S.p.A. about Microsoft's licensing policies was settled out of court in March, but the contents of the agreement remain confidential.

As we revealed in May, Microsoft offered to settle the complaint raised by CISPE, which is backed by AWS, but the trade group refused, saying the offer was "pretty paltry and very far short of anything we consent acceptance of."

Google has also weighed in on the argument, claiming customers are being forced to pay Microsoft's licensing "tax" when they want to run software, such as Office, in any other cloud. Google has also made a complaint against Microsoft with the Federal Trade Commission in the US, claiming it is trapping customers in Azure.

Just this week it emerged that the European Commission's antitrust team is edging closer to a formal probe of a complaint made by Slack in 2020 over Microsoft's decision to bundle Teams with its dominant Office 365 suite. Nextcloud in Germany has also lodged a complaint with the EU over Microsoft bundling OneDrive with Windows.

Christian Steinle, billed by CISPE as an antitrust expert at Germany-based law firm Gleiss Lutz, said: "CISPE's aim in applying to be joined in the ongoing antitrust proceedings against Microsoft is to prevent the software giant from exploiting its superior adjacent-market position in the closely interconnected markets for software products and cloud services to strengthen its own cloud service, Azure."

We have asked Microsoft to comment. ®

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