Microsoft has called for more to address Europe’s cloud antitrust complaints

The founder of a coalition of technology companies that accused Microsoft of anti-competitive behavior based on how it sells and packages its cloud services in Europe says the software giant needs to do more to respond to antitrust complaints against it.

Microsoft posted a blog post this week confirming the antitrust concerns raised by regulators and authorities about his cloud business practices in Europe, which he also uses to outline a series of “meaningful” actions he will take to address the issues raised.

As detailed in the report on Reuters Last month, it was reported that these concerns prompted the European Commission’s antitrust authorities to send a questionnaire to Microsoft’s customers and competitors asking for their opinion on Microsoft’s licensing deals related to the cloud.

“The Commission has information that Microsoft may use its potential dominance in certain software markets to prevent competition in certain cloud computing services,” the questionnaire said. reported Reuters.

This information is based on complaints submitted to the European Commission by several European cloud service providers, including the German manufacturer of synchronization and file sharing software NextCloud and the French infrastructure provider as a service (IaaS) OVHcloud.

Nextcloud’s antitrust lawsuit, filed in early 2021, outraged the way Microsoft has merged its OneDrive cloud storage service and Teams online collaboration platform with its flagship Windows operating system. It claims that this practice “aggressively forces users to register and submit their data to Microsoft”.

Since then, Nextcloud’s complaint has won the support of more than 50 non-profit technology companies and organizations, leading to the formation of a coalition that collectively opposes how Microsoft sells and packages its cloud software in Europe. The company has also filed a similar complaint against Microsoft with Germany’s own antitrust authorities.

IN blog post from May 18, 2022Microsoft President and Vice President Brad Smith said the company was taking “sensible action” on the lawsuits against it, including accepting five promises it said would shape its approach to doing business in Europe in the coming years.

These commitments include commitments to ensure that its “public cloud meets Europe’s needs and serves European values”, that its platforms are designed to ensure the “success of European software developers” and that it provides support for European providers. on the cloud ”through partnership.

The other two promises made by Microsoft include a commitment “to ensure that our cloud offerings meet the sovereign needs of European governments, in partnership with local trusted technology providers” and a pledge to “recognize that European governments regulate technology and we will we adapt to and support these efforts. “

According to Microsoft, these promises mark the beginning of work to tackle regulatory issues and aim to “lead all aspects of our cloud business, improve transparency for the public and help us better meet Europe’s technological needs”. .

In addition, the company said it was also taking steps to ensure that European cloud providers could “more easily host a greater variety of Microsoft products in their cloud infrastructure.”

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

Although these actions are “broad”, they are also not “necessarily comprehensive”, Smith continued. “As I said in a video meeting a few weeks ago with the CEO of a European cloud service provider, our immediate goal is to ‘turn a long list of problems into a shorter list of problems.’

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

Speaking to Computer Weekly, Nextcloud CEO Frank Karliczek said the actions Microsoft is committed to are indicative of the pressure it is experiencing as a result of the complaints, but there is more that the company needs to look for.

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

Regarding the follow-up of Nextcloud and the coalition would like to see Microsoft take action, Karlicek said the company’s commitment to make parts of its open source cloud stack will be a start.

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

“They’re trying to solve that here by giving other cloud vendors the ability to hold that Microsoft stick, but obviously that’s not enough, because you’re still dependent on Microsoft because Microsoft isn’t open source.”

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

Data from the IT market observer Synergy Research Group in September 2021 sheds some light on the impact that the growing retention of the US technology giant on the European market is having on the fate of local cloud providers.

While the market itself has grown almost fourfold since 2017 to $ 8.8 billion, European cloud providers have seen their market share fall from 27% to 16% over the same period, although revenue which these companies do has doubled during this time period.

Computer Weekly also contacted OVHcloud about its stance on Microsoft’s plans, given that it has also filed an antitrust complaint against the company with regulators in the past and received the following statement in response.

“Microsoft acknowledges the merits of our complaint and we can only regret that it must mobilize the relevant authorities to ensure a level playing field in a Europe where competition is both open and fair,” the statement said.

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