Microsoft settles with European cloud trade body over antitrust complaints

Microsoft has reached an agreement with Cloud Infrastructure Services Providers in Europe (CISPE), nearly two years after the European not-for-profit trade association filed an antitrust complaint with the European Commission (EC) alleging that Microsoft was using its market dominance in the business software realm to tether customers to its Azure cloud.

Settlement discussions kicked off in April last year as Microsoft sought to keep regulators at bay, though neither party would reveal what the proposed changes to the status quo were. Some 15 months on, we can now confirm what’s happening.

The core issue relates to a 2019 licensing change whereby Microsoft made it more expensive to run Microsoft’s enterprise software on rival cloud services.

Settled

The deal reached today includes a memorandum of understanding signed by CISPE members and Microsoft, whereby Microsoft commits to make changes to address CISPE’s complaints. This includes a collaboration between all the parties to release an “enhanced version of Azure Stack HCI” for European cloud providers, which will offer features such as multi-session virtual desktop infrastructure based on Windows 11; free Extended Security Updates (ESU); and pay-as-you-go licensing for SQL Server.

Notably, CISPE counts AWS as one of its bigger members, sitting alongside other smaller European cloud services providers such as Anexia and UpCloud. However, the agreement reached today excludes AWS which wasn’t part of the negotiations, according to CISPE.

CISPE also said it would set up an independent European Cloud Observatory (ECO) “to monitor the development and ongoing evaluation” of the changes, which Microsoft has nine months to deliver on.

As part of the settlement, CISPE said that Microsoft will also pay an undisclosed lump-sum to CISPE to cover litigation and campaigning costs so far. In return, CISPE said it will withdraw its antitrust complaint with the EC.

“This is a significant victory for European cloud providers — CISPE has given Microsoft the benefit of the doubt and believes that this agreement will provide a level playing field for European cloud infrastructure service providers and
their customers,” Francisco Mingorance, CISPE Secretary General, said in a statement issued to TechCrunch.

However, Ryan Triplette, executive director for the Coalition for Fair Software (CFSL), said that the move merely benefits a handful of providers in Europe and underscores the need for the issue to be addressed globally.

“This settlement is Microsoft’s latest attempt to avoid regulatory scrutiny without addressing the underlying anticompetitive practices that impact millions of cloud customers worldwide,” Triplette said. “Even after this agreement is in place, Microsoft will continue to use its unfair software licensing practices to limit choice, drive up costs, and lock in customers. A settlement with some smaller European providers that exclude the vast majority of customers and cloud providers does nothing to address Microsoft’s global anti-competitive behavior.”