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European cloud providers and Microsoft negotiating to solve anti-competitive lawsuit

A hot potato: An organization of European cloud infrastructure providers has sued Microsoft for its alleged anti-competitive licensing schemes in the cloud computing industry. The group is now willing to solve the issue amicably – if the Redmond giant cooperates.

Cloud Infrastructure Service Providers in Europe (CISPE) and Microsoft have entered talks to resolve a lawsuit the organization brought against Redmond over its cloud licensing policies. The group, including European cloud companies and Amazon Web Services (AWS), lament the significant cost increases Microsoft has forced on them.

The non-profit trade association filed its anti-competitive complaint to the EU’s Directorate-General for Competition in 2022. It contends that a Microsoft policy introduced in 2019 forced customers to enter new licensing schemes if they chose a cloud provider other than Azure. The policy forbade previously purchased on-premise licenses for Microsoft software from third-party cloud platforms.

According to a 2023 study commissioned by CISPE, Microsoft forced customers on non-Azure cloud platforms to spend 80 to 100 percent more with its “unfair” software licensing. The consortium’s secretary general, Francisco Mingorance, said that the tech titan is essentially choosing to undermine the viability of cloud infrastructure in Europe while restricting cloud options available to EU customers.

The trade group now supports a “fast and effective” resolution of the matter, Mingorance said, but Microsoft must end its unfair software licensing schemes to bring the lawsuit to an end. Last year, the software giant settled with OVHcloud, Aruba S.p.a, and DCC to end other cases related to similar software licensing issues.

Meanwhile, Google wants EU authorities to investigate Microsoft’s business practices closely. Google Cloud Vice President Amit Zavery said that Redmond is abusing its dominant position in the on-premise business to force higher costs and restrict choices on the cloud.

Microsoft said it is working “constructively” with CISPE to address “concerns” raised by European cloud operators. The three trillion dollar software giant resolved previous cases with confidential terms. So, amicable conditions for the CISPE settlement will likely remain undisclosed.

While Microsoft and CISPE are fighting for the soul of Europe’s cloud, regulators from other regions are closely watching the situation. According to anonymous sources, competition agencies in the US, Japan, South Korea, and elsewhere are considering moves against Microsoft’s latest restrictions on software licensing.

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