Microsoft faces new antitrust complaint over cloud software licensing in Europe

Adjustments Microsoft made to its cloud licensing of Home windows and software software program to “make bringing workloads and licenses to companions’ clouds simpler,” the corporate says, have drawn the ire of these cloud companions, a few of whom have collectively filed an antitrust grievance within the European Union.

They’re involved that Microsoft is utilizing software program licensing to restrict European companies’ alternative of cloud service supplier for providers together with desktop virtualization and software internet hosting.

Microsoft’s licensing modifications got here into impact on October 1, 2022.

Microsoft chief companion officer Nicole Dezen described the modifications as making it simpler for enterprises to deliver software program they’d licensed to a companion’s cloud — for instance working functions on Home windows 11 on multi-tenant servers — and for service suppliers to construct and promote options extra simply of their most popular cloud.

Nevertheless, modifications additionally embrace some notable restrictions. Enterprises can’t transfer their present licensed software program to the clouds of Alibaba, Amazon Internet Companies, Google Cloud Platform, Microsoft Azure or any outsourcer counting on their infrastructure, and they’d as an alternative have to accumulate new licenses from the related internet hosting service.

That’s nice information for small regional cloud hosts — until their providers, like these of Netherlands-based Leaseweb, embrace the creation of hybrid clouds involving their very own infrastructure and that of Microsoft Azure, or one of many different hyperscalers on Microsoft’s exclusion checklist.

It was these restrictions that irritated Cloud Infrastructure Service Suppliers in Europe (CISPE), a Belgian non-profit whose members embrace Amazon Internet Companies, a raft of French net and software internet hosting corporations (of which the best-known is OVH), Leaseweb within the Netherlands, and different home and multinational internet hosting corporations primarily based in Finland, Italy, and Spain.

Formal grievance

On November 9, 2022, CISPE filed a proper grievance with the European Fee’s Directorate-Normal for Competitors (DG Comp), the highest antitrust authority for the European Union’s 27 member states. It stated, “Microsoft makes use of its dominance in productiveness software program to direct European clients to its personal Azure cloud infrastructure to the detriment of European cloud infrastructure suppliers and customers of IT providers.”

CISPE declined to offer full particulars of its grievance, citing the necessity to give the European Fee’s case workforce time to learn it first, however has launched an govt abstract.

A European Fee spokeswoman stated that CISPE had knowledgeable the Fee it could submit a grievance in opposition to Microsoft, and that the Fee would assess it primarily based on its commonplace process.

Step one in that process is to find out whether or not Microsoft holds a dominant place out there the grievance issues. Then, it could select to open an investigation into whether or not that dominance is being abused. On the finish of that investigation, it could difficulty an announcement of objections, to which the events to the case could reply earlier than the Fee reaches a proper resolution, which can end in imposing motion or a high quality.

Three in a row

It’s not the primary such grievance the Fee has acquired from Microsoft rivals, although. In early 2021, German on-line storage service supplier NextCloud filed a grievance with DG Comp concerning Microsoft bundling Onedrive with its Microsoft365 software program suite. Its grievance later received the assist of a number of European on-line service suppliers, totally different from CISPE’s membership.

OVH, together with fellow CISPE member Aruba.it and a consortium of Danish cloud service suppliers, then adopted, submitting a joint grievance about Microsoft’s practices in early 2022, an OVH spokeswoman stated.

After these two complaints grew to become public, Microsoft president Brad Smith acknowledged on the corporate’s weblog in Might the validity of some claims and introduced plans to assist European cloud suppliers via modifications to licensing — the modifications that got here into impact on October 1, 2022.

Whether or not the third grievance, CISPE’s, will immediate additional modifications in Microsoft’s stance stays to be seen. However that is maybe the perfect hope for enterprises and repair suppliers affected by the licensing guidelines. Whereas European Union antitrust circumstances can lead to huge fines, they proceed extraordinarily slowly.

Earlier European antitrust actions in opposition to Microsoft over the bundling of 1 its merchandise with one other have dragged on for years. In 2004 the corporate paid a $611 million high quality after the Fee discovered it responsible of illegally bundling media participant software program with Home windows XP (launched in 2001), after which $357 million in 2006 and one other $1.3 billion in 2008 for failing to adjust to the 2004 ruling.

In 2013, it was additionally fined $731 million for bundling its Internet Explorer browser with Windows 7, a case that started in 2011 in opposition to an working system launched in 2009.

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