Google has promised EU cloud businesses €470 million ($512 million) in compensation in an attempt to convince them not to drop their claims against Microsoft. At one time, the CISPE association complained to the EU regulators about the giant from Redmond, but later the parties reached an agreement and the complaint was withdrawn. Google itself also complained about Microsoft’s behavior to the EU regulator.
Cloud Infrastructure Services Providers in Europe (CISPE) renounced its claims last week – the companies complained of problems with licensing Microsoft software when used in clouds outside of Azure. Previously, CISPE complained that Microsoft made it extremely difficult for customers to change cloud providers, essentially tying their software to Azure services.
Microsoft and CISPE settled the case, but just a few days before, Google put forward a counteroffer – not to drop the complaint for a large compensation. At the same time, Google offered mainly not money, but cloud software licenses worth €455 million for a period of 5 years and only €14 million in the form of real financial assistance. At one time, AWS also supported the complaint against Microsoft, but was unable to do anything despite the fact that it itself is a member of CISPE.
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The association, which includes many small providers, decided to meet Microsoft halfway, which promised financial compensation in the equivalent of $22 million and expanded opportunities to use Microsoft applications in third-party clouds. Companies will be provided with access to the Azure Stack HCI platform, which will allow them to run Microsoft software at the same prices that the IT giant itself offers in Azure.
Although Google has long lagged behind Microsoft and AWS in the cloud markets, the company has made significant strides in this area. In the first quarter, the cloud business brought the company $900 million in profit, while experts predicted it at $672.4 million. Google’s cloud division is considered by the company as one of the promising vectors for growth. The figures could be further improved by stimulating regulatory interest in Microsoft’s activities – an investigation in the EU could lead to a turnover fine of 10% of the competitor’s global revenue.
Microsoft has extensive experience resolving such disputes. For example, in 2004, it paid more than $9.75 million to the Google-backed group Computer and Communications Industry Association to drop claims against Redmond in the EU. Although there is one less problem for Microsoft for now, it is still in the field of view of European authorities in connection with the investment of $13 billion in OpenAI – the legality of the latter’s privileged use of Redmond’s cloud technologies is questionable.
In addition, Microsoft faces a large fine in the European Union for abusing its dominant market position by linking the Teams application to other software. Finally, antitrust investigations are still ongoing in the UK and US. In the United Kingdom, the CMA regulator has been studying the cloud market since 2023, and in the US, Microsoft is the subject of two investigations. The first began in January 2024 and is related to the study of the activities of AI service providers, the second is dedicated to Microsoft, OpenAI and NVIDIA – the influence of three key players on the AI industry is explored.