Microsoft urged to do more to address European cloud antitrust complaints

The founding member of a coalition of tech companies that accused Microsoft of anti-competitive behaviour, primarily based on the way it sells and packages its cloud companies in Europe, has claimed the software program big should do more to address the antitrust complaints being levied in opposition to it.

Microsoft published a blog post this week acknowledging the antitrust issues which were raised with regulators and authorities about its cloud-related enterprise practices in Europe, which it additionally used to define a collection of “meaningful” actions it might take to address the problems raised.

As detailed in a report on Reuters final month, these issues are identified to have prompted the European Commission’s antitrust authorities to ship a questionnaire to Microsoft prospects and opponents, asking for his or her views on Microsoft’s cloud-related licensing offers.

“The commission has information that Microsoft may be using its potentially dominant position in certain software markets to foreclose competition regarding certain cloud computing services,” the questionnaire mentioned, reported Reuters.

This info is predicated on complaints filed with the European Commission by a number of European cloud service suppliers, together with German file sync and share software program maker NextCloud and French infrastructure-as-a-service (IaaS) supplier OVHcloud.

Nextcloud’s antitrust grievance, filed in early 2021, takes umbrage on the method Microsoft bundles its OneDrive cloud storage service and on-line collaboration platform Teams in with its flagship Windows working system. It claims this follow is “aggressively pushing consumers to sign up and hand over their data to Microsoft”.

Nextcloud’s grievance has since gained the assist of more than 50 tech companies and non-profit organisations, main to the formation of a coalition that’s collectively talking out in opposition to how Microsoft sells and packages its cloud software program in Europe. The firm has additionally filed a grievance in opposition to Microsoft of an identical nature with Germany’s personal antitrust authorities.

In a blog post dated 18 May 2022, Microsoft president and vice-chair Brad Smith mentioned the corporate was taking “meaningful action” on the complaints being raised in opposition to it, together with the adoption of 5 pledges that it claims will form its method to doing enterprise in Europe in years to come.

These pledges embody commitments to guaranteeing its “public cloud meets Europe’s needs and serves Europe’s values”, that its platforms are arrange to guarantee “the success of European software developers” and that it’s going to present “support for European cloud providers” via partnership.

The remaining two pledges made by Microsoft embody a dedication to “ensure our cloud offerings meet European governments’ sovereign needs, in partnership with local trusted technology providers” and a vow to “recognise that European governments are regulating technology, and we will adapt to and support these efforts”.

According to Microsoft, these pledges mark the beginning of the work it’s doing to address regulatory issues, and are supposed to “guide all aspects of our cloud business, enhance transparency for the public, and help us to better support Europe’s technology needs”.

In addition, the corporate mentioned it was additionally taking steps to guarantee European cloud suppliers may “more easily host a wider variety of Microsoft products on their cloud infrastructure”.

It added: “This will make European cloud providers more competitive by enabling them to better serve customers.”

While these actions are “broad” they’re additionally not “necessarily exhaustive”, continued Smith. “As I mentioned in a video assembly just a few weeks in the past with the CEO of a European cloud supplier, our quick objective is to ‘turn a long list of issues into a shorter list of issues’.

“In other words, let’s move rapidly so we can learn quickly. Today we’re taking a big step, but not necessarily the last step we will need to take, and we look forward to continuing feedback from European cloud providers, customers and regulators,” he added.

Speaking to Computer Weekly, Nextcloud CEO Frank Karlitschek mentioned the actions Microsoft was committing to take have been indicative of the stress it’s feeling within the wake of the complaints, however there may be nonetheless more the corporate ought to be trying to do.

“The main issue here is that we have a super-dominant position from Microsoft… [It is] really dominating this whole market and this is not healthy,” he mentioned. “That’s not healthy for the open market, that’s not healthy for privacy and it’s not healthy for digital sovereignty for Europe. We want the regulators to do something against it to make sure there’s fair competition and a level playing field.”

In phrases of the follow-up motion Nextcloud and the coalition would love to see Microsoft take, Karlitschek mentioned a dedication from the corporate to make components of its cloud stack open supply can be a begin.

“Across Europe, you have this movement towards digital sovereignty, where governments want to be in control of their data and applications. So, if you are a government or a company and you use Microsoft or Google or Amazon’s service – even if it’s hosted in Europe – that’s still under US jurisdiction because of the CLOUD Act,” he mentioned.  

“This is what they’re trying to solve here by giving other cloud providers the option to hold this Microsoft stick, but obviously this is not enough, because you still have a dependency to Microsoft because Microsoft is not open source.”

He continued: “Digital sovereignty would only come with open source software. What it has proposed so far is interesting and is a move in the right direction, in response to the pressure it is under, but this is not enough.”

Data from IT market watcher Synergy Research Group in September 2021 shed some gentle on the impression the US tech big’s rising maintain on the European market was having on the fortunes of native cloud suppliers.

While the market itself has grown almost fourfold since 2017 to a worth of $8.8bn, European cloud suppliers have seen their share of the market fall from 27% to 16% throughout that very same time interval, though the income these companies make has doubled throughout that point.

Computer Weekly additionally contacted OVHcloud for its tackle Microsoft’s plans, given it has additionally raised an antitrust grievance in opposition to the corporate with regulators up to now, and acquired the next assertion in response.

“Microsoft acknowledges the merits of our complaint and we can only regret that it has to go as far as mobilising the relevant authorities to secure a level playing field in Europe, where competition is both open and fair,” mentioned the assertion.  

“We are now waiting to see the concrete implementation conditions of these resolutions and remain committed to defending a level playing field for the European cloud ecosystem.”