European Regulators Ask Questions About Microsoft Cloud Practices

(Bloomberg) — European regulators ask partners and rivals of Microsoft Corp. for information related to a complaint filed against the software maker for alleged distortions of competition in the market for cloud computing services.

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The European Commission released a questionnaire in March, seen by Bloomberg News, focusing on how Microsoft licenses its products. The questions could lead to a formal investigation and follow an antitrust complaint last year from France’s OVH and two other cloud providers to the European Union’s antitrust watchdog over Microsoft’s behavior.

The questionnaire asks respondents whether they have signed agreements to be part of Microsoft programs that allow other partner and cloud providers to resell Microsoft programs, as well as whether the company is making it more difficult or expensive to run some of its programs on competing networks. from cloud providers.

“We can indeed confirm that the commission has received the complaint,” said a European Commission press officer. “We can’t share any other information about this at this stage.”

Microsoft — the maker of leading Office and Windows software — is also the No. 2 global vendor of cloud infrastructure, renting compute and storage delivered to customers over the Internet. Inc. is the largest provider of such services, and Google of Alphabet Inc. trying to get hold of Microsoft. With companies increasingly mixing and matching programs from the vendors, or using multiple clouds, OVH and others argue that Microsoft’s software license terms put them at a disadvantage when running Microsoft products and make it easier or cheaper to buy things like Windows, Office and Windows. server to connect. with Microsoft’s own Azure cloud.

“The cloud market is growing and European cloud providers have built successful business models using Microsoft software and services,” Microsoft said in an emailed statement. “We are constantly evaluating how best to support partners and make Microsoft software available to customers in all environments, including those from other cloud providers.”

Microsoft has largely escaped the global antitrust investigation facing other major tech companies such as Meta Platforms Inc., Apple Inc., Google and Amazon. But the European Union this month signed a deal on a new law that will pave the way for billions of euros in fines and takeover bans for the worst violators of a new Digital Markets Act. The rules target so-called gatekeeper companies with the power to control distribution in their markets. That includes Microsoft.

The request for information asks for details on things like whether Microsoft’s cloud-based Windows and Office products can run on competitors’ cloud products or whether Microsoft would need to make “technical adjustments” to make that possible. And it asks whether the respondent thinks it is necessary to include certain Microsoft products or services in its own cloud infrastructure offering “in order to compete effectively”.

The companies were also asked to compare the software license terms their customers receive with those that Microsoft grants to its own customers under a program called the Azure Hybrid Benefit Program. It gives customers a discount for running certain Microsoft products, such as Windows Server, on Azure instead of another cloud provider. The companies have until April 7 to respond to the questionnaire.

The questionnaire is likely part of the commission’s first fact-finding exercise, said Richard Pepper, a partner at Macfarlanes LLP. “At this stage, it is too early to meaningfully assess whether this will lead to action. Nevertheless, this is certainly an area for attention for the committee.” Microsoft previously faced more than a decade of antitrust disputes with the European Union that ended in 2009 when the company agreed to give Windows users a choice between web browsers. The Redmond, Washington software maker also paid $1.68 billion in files in EU antitrust investigations before that date.

(Updates to Microsoft’s statement in the sixth paragraph.)

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