Microsoft managed to avoid a lengthy official investigation into the activities of its cloud division by European regulators. According to Bloomberg, after negotiations, the company reached an agreement with the AWS-backed lobbying group CISPE, which had complained to European authorities about Microsoft’s licensing agreements, the terms of which made it difficult for competitors to move from its cloud.
Cloud Infrastructure Services Providers in Europe (CISPE), which unites cloud service providers, has pledged to withdraw its complaint to EU regulators – the association had previously argued that Microsoft had tied the use of its own business software too tightly to Azure cloud services. According to Microsoft President Brad Smith, consultations with CISPE have been ongoing for more than a year, but now not only past problems have been resolved, but also a strategy for joint development in the future has been developed, thanks to which the European Union and other markets will become even more competitive.
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Microsoft has nine months to offer “more fair” licensing terms. In addition to paying $21.7 million in lost revenue and licensing costs over the past two years, the company will develop a special version of Azure Stack HCI for European cloud providers, allowing CISPE members to run Microsoft software on their clouds while paying the same money as customers Azure. In addition, CISPE will create an independent structure, the European Cloud Observatory, to monitor the situation. The European Commission said it would assess the impact of the deal on competition in the EU market.
However, not everyone is happy with the state of affairs. Some non-CISPE providers would like to know whether monetary compensation will be made to non-CISPE entities. They claim that the powerful company has, in fact, paid the trade association to remain silent and has no intention of making fundamental changes to its software. It is extremely important that the relaxed licensing terms do not apply to AWS, Google Cloud Platform and Alibaba Cloud, DataCenter Dynamics notes.
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AWS said the agreement will do nothing to help the vast majority of Microsoft customers, who still won’t be able to seamlessly use the cloud at their discretion in Europe and around the world. Google Cloud says it is looking for other ways to combat Microsoft’s anti-competitive licensing practices in Europe. At one time, Google not only complained to Microsoft in the UK, but also canceled the fee for transferring customer data when they switched to another provider. At the same time, AWS supported Google’s accusations.
At one time, European regulators had already begun an investigation into the activities of the cloud giant. Although the CISPE application was filed in November 2022, the origin of the complaint likely stems from OVHcloud, which first filed a related claim back in 2021. In 2022, Aruba IT joined it, and a little later CISPE announced support for the antitrust case. Another impetus was the entry into force of the European Data Act, which should simplify the transition of customers from provider to provider.