European regulators raise questions about Microsoft Cloud practices

(Bloomberg) – European regulators are asking Microsoft Corp. partners and rivals for information in a lawsuit filed against the software maker alleging anti-competitive behavior in the cloud computing services market.

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In March, the European Commission circulated a questionnaire, seen by Bloomberg News, focusing on how Microsoft licenses its products. The questions could lead to a formal investigation and follow a cartel complaint last year from France’s OVH and two other cloud providers to the EU’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 partners and cloud providers to resell Microsoft programs, as well as questions about whether the company makes it harder or more expensive to run some of their programs on rival. network of cloud providers.

“We can confirm that the Commission has received the complaint,” said a spokesman for the European Commission. “At this time, we can not share any other information about this.”

Microsoft – the maker of market-leading Office and Windows software – is also the No. 2 global seller of cloud infrastructure, leasing computing power and storage space delivered over the Internet to customers. Amazon.com Inc. is the largest provider of such services, and Alphabet Inc.’s Google is trying to catch Microsoft. As companies increasingly mix and match vendor programs or use multiple clouds, OVH and others argue that Microsoft’s software license terms put them at a disadvantage in running Microsoft products and make it easier or cheaper to pair things like Windows, Office, and Windows Server 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 email. “We are constantly evaluating how we can best support partners and make Microsoft software available to customers across all environments, including those from other cloud providers.”

Microsoft has largely escaped the global antitrust investigation that other major technology companies such as Meta Platforms Inc., Apple Inc., Google and Amazon are facing. But this month, the EU has reached an agreement on a new law that paves the way for fines of several billion euros and a takeover ban for the worst offenders of a new law on digital markets. The rules are aimed at so-called gatekeeper companies with the power to control the distribution in their markets. It includes Microsoft.

The request for information asks for details about things like whether Microsoft’s cloud-based Windows and Office products are capable of running on rival cloud products, or whether Microsoft should “make technical adjustments” to enable it. And it asks whether the respondent feels the need to include certain Microsoft products or services in its own cloud infrastructure “in order to compete effectively.”

Companies were also asked to compare the software license terms their customers receive with those that Microsoft extends 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, in Azure instead of another cloud provider. Companies have until April 7 to respond to the questionnaire.

The questionnaire is likely part of the commission’s initial fact-finding exercise, said Richard Pepper, partner at Macfarlane’s LLP. “At the moment, it is too early to judge whether this will intervene. Nevertheless, this is definitely a focus area for the Commission.” Microsoft has previously faced more than a decade of antitrust conflicts with the EU, which ended in 2009 with the company agreeing to give Windows users a choice among web browsers.The Redmond, Washington-based software maker also paid out 1.68 billion euros in files in EU antitrust investigations before that date.

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

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