Microsoft settles cloud computing complaint for $22M

Microsoft settles cloud computing complaint for $22M is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• Microsoft has reached a $21.7 million agreement with Cloud Infrastructure Services Providers in Europe (CISPE), to resolve antitrust complaints about its cloud computing licensing practices.
• This agreement avoids an EU antitrust investigation and potentially significant fines and will provide a level playing field for cloud infrastructure service providers in Europe.

OUR TAKE
CISPE, a cloud services organisation whose members include Amazon and dozens of small EU cloud providers, complains to the European Commission in late 2022 that contract terms imposed by Microsoft on October 1 are harming Europe’s cloud computing ecosystem.
–Zora Lin, BTW reporter

What happened

Microsoft has reached a $21.7 million agreement with cloud services organisation CISPE to resolve antitrust complaints about its cloud computing licensing practices, avoiding an antitrust investigation by the European Union and a potentially large fine.

In the multibillion-dollar cloud computing space, Microsoft trails market leader Amazon but is ahead of Alphabet’s Google. The industry has come under antitrust scrutiny on both sides of the Atlantic.

“After working with CISPE and its European members for more than a year, I am pleased that we have not only addressed their past concerns, but have also worked together to define a path forward that brings more competition to the cloud computing market in Europe and beyond,” says Brad Smith, president of Microsoft.

CISPE says Microsoft will compensate CISPE members for lost revenue due to licensing fees over the past two years. The company doesn’t disclose financial figures.

CISPE also says it will now withdraw its complaint against the EU and will not initiate or support complaints on these issues in Europe and elsewhere.

The settlement does not include Amazon Web Services (AWS), Google Cloud and Alibaba Cloud, which prompted criticism from the first two companies.

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Why it’s important

The agreement will provide a level playing field for European cloud infrastructure service providers and their customers.

A number of regulators have begun investigating Microsoft’s licensing practices, helping to protect the cloud market from Microsoft’s anti-competitive practices. Continuing to oppose Microsoft’s monopolistic operations can promote choice, innovation and growth in Europe’s digital economy.

The agreement brings more competition to the cloud computing market in Europe and elsewhere. Microsoft and CISPE have worked together to define the path forward, which helps promote competition and innovation in the marketplace.

AWS and Google Cloud have expressed dissatisfaction and criticism of the content of the agreement, believing that such an agreement may have a negative impact on market competition, and hope that other regulators will continue to investigate Microsoft’s licensing practices. This agreement not only resolves the antitrust issues facing Microsoft in Europe, but also affects the competitive landscape and future regulatory posture of the entire cloud computing market.