Spanish startups say 'no más' to Microsoft cloud dominance

Group alleges anticompetitive behavior

Updated Microsoft is facing a complaint over alleged anticompetitive practices in the Spanish cloud market.

The complaint was filed by the Spanish Startup Association, a group representing more than 700 startups in the country. It concerns anticompetitive behavior that the organization alleges it has detected in recent years.

According to the group, Microsoft has used its operating systems and productivity software dominance to nudge customers towards Azure, the company's own cloud. The association also alleges that artificial barriers to competition have been erected, including barriers to data portability or contract clauses to restrict competition regarding software licenses.

The complaint was filed with Spain's National Markets and Competition Commission (CNMC). The association said: "This action arises in response to the restrictive practices observed in the cloud services market, which are significantly affecting both cloud providers and clients within the startup ecosystem in Spain."

Carlos Meteo, president of the Spanish Startup Association, said: "We believe that all companies should be able to compete in an environment of equality so as not to be left behind either as end users or as companies providing this technology.

"We believe that this is a crucial step to ensure that the cloud market in Spain is not only innovative but also accessible and fair for all actors involved, especially for startups that are both the basis and the future of our digital economy."

The Register approached Microsoft for a response.

Microsoft has been the subject of several lawsuits and complaints. ValueLicensing, for example, took exception to an alleged choking off of pre-owned perpetual licenses thanks to contractual restrictions. The UK's Competition watchdog was also asked to take a close look at the company's practices following an Ofcom review that found Microsoft and AWS accounting for between 70 and 80 percent of the UK cloud infrastructure services market.

The company was also the subject of a complaint from lobby group CISPE – a consortium of cloud infrastructure providers in Europe with a membership that includes AWS – over alleged discounting of its software when bundled with Azure.

In 2023, Google added to the chorus of complaints regarding Microsoft's alleged behavior and described the extra fees demanded by the company for running its software on rival clouds as a "tax."

CISPE commented on today's complaint: "The case brought against Microsoft by the Spanish StartUps Association is another example of Microsoft's widespread and ongoing use of unfair software licensing practices to force customers into its Azure cloud infrastructure. What's important about this case is that it has been filed by European cloud customers.

"Startups are essential to the vibrant digital economy that Europe needs and they should be free to innovate and build their businesses on whichever cloud infrastructure they choose."

It added: "Restrictive licensing terms that make it difficult or economically unsustainable to run essential Microsoft software on non-Microsoft clouds must be rapidly brought to an end. Regulators, whether national or European, have a vital role in forcing dominant software providers to offer fair terms for all customers." ®

Updated at 16.12 UTC on May 7, 2024, to add:

A Microsoft spokesperson sent a statement to The Reg following publication of this article.

"Microsoft provides choice and flexibility for our customers to switch to another cloud provider at no cost, and our licensing terms enable our customers and other cloud providers to run and offer Microsoft software on every cloud. We will engage with the Spanish Start Up Association to learn more about its concerns."

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