The UK’s Competition and Markets Authority has launched an investigation into Microsoft’s licensing practices, amid allegations that the company unfairly inflates prices for businesses using rival cloud providers such as Amazon Web Services, Google Cloud, and Alibaba Cloud.
If the case, filed by Maria Luisa Stasi, the competitors’ lawyer, before the Competition Enchantment Tribunal, bears out, it could potentially result in British companies collectively claiming more than £1 billion ($1.27 billion) in damages.
UK firms are allegedly penalized by Microsoft for adopting rival cloud services, as the company imposes higher fees for Windows Server software. She claims that these tactics aim to steer clients towards Microsoft’s Azure offering, ultimately stifling competition in the cloud computing landscape.
The UK’s Competition and Markets Authority (CMA) has launched an investigation into the country’s cloud computing market, prompting the authorized motion. The investigation into market leaders Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform is expected to yield further findings in the near future. Microsoft’s licensing terms for merchandise resembling Windows Server and Microsoft 365 are under scrutiny.
Licensing practices below hearth
In 2020, Microsoft introduced new licensing fees for running its software on major cloud platforms. The company’s recent changes have successfully prompted customers to prefer Microsoft Azure over other cloud computing platforms. Microsoft’s market prospects have surged ahead of its competitors following the implementation of price changes.
The US Federal Trade Commission (FTC) has launched an antitrust probe into Microsoft’s cloud computing business practices across the Atlantic. Pursuant to accusations, a company allegedly utilizes limiting contractual language to deter potential clients from migrating to rival ecosystems.
Microsoft has faced similar challenges in mainland Europe and Ireland. In February of this year, Microsoft’s corporate division reached a settlement with the Cloud Infrastructure Service Providers in Europe (CISPE) over antitrust allegations, agreeing to pay a fine of €20 million ($22 million). As part of the agreement, the company committed to standardizing pricing practices between smaller cloud providers and its Azure platform. Despite this, Google lodged a fresh complaint with the European Commission, alleging that Microsoft exploited licensing terms to confine customers within the Azure framework.
OVHCloud, a prominent French cloud provider, has expressed concerns about hyperscalers offering popular software applications alongside their cloud services, thereby limiting the performance capabilities of third-party platforms. OVH Cloud settled its antitrust case with Microsoft in July, terminating the dispute following a mutually agreeable resolution.
A rising market, shrinking competitors
European cloud providers are grappling with significant challenges, according to insights from Synergy Analysis Group. Between 2017 and 2022, the company’s market share plummeted from 27% to a mere 13%, despite the overall market experiencing a remarkable fivefold increase to €10.4 billion ($11 billion)?
As the Cloud Major Alliance’s investigation draws to a close, industry players and regulatory bodies worldwide are urging increased transparency in insurance policy advertising and demanding fair market practices to ensure the integrity of the cloud computing landscape.
