Microsoft prompted to do more to deal with European cloud antitrust grievances

In the wake of Microsoft setting out its initial steps towards attending to the antitrust grievances directed at it by some European cloud service providers, one plaintiff stated the company requires to go even more by making more of its off-premise portfolio open source

Caroline Donnelly


Published: 20 May 2022 16: 55

The establishing member of a union of tech companies that implicated Microsoft of anti-competitive behaviour, based upon how it offers and packages its cloud services in Europe, has actually declared the software application giant need to do more to attend to the antitrust problems being imposed versus it.

Microsoft released an article today acknowledging the antitrust issues that have actually been raised with regulators and authorities about its cloud-related company practices in Europe, which it likewise utilized to detail a series of “significant” actions it would require to resolve the concerns raised.

As detailed in a report on Reuters last month, these issues are understood to have actually triggered the European Commission’s antitrust authorities to send out a survey to Microsoft consumers and rivals, requesting for their views on Microsoft’s cloud-related licensing offers.

” The commission knows that Microsoft might be utilizing its possibly dominant position in specific software application markets to foreclose competitors concerning particular cloud computing services,” the survey stated, reported Reuters

This info is based upon grievances submitted with the European Commission by a number of European cloud company, consisting of German file sync and share software application maker NextCloud and French infrastructure-as-a-service (IaaS) service provider OVHcloud

Nextcloud’s antitrust problem, submitted in early 2021, takes umbrage at the method Microsoft packages its OneDrive cloud storage service and online cooperation platform Teams in with its flagship Windows running system. It declares this practice is “strongly pressing customers to register and turn over their information to Microsoft”.

Nextcloud’s grievance has actually because won the assistance of more than 50 tech companies and non-profit organisations, resulting in the development of a union that is jointly speaking up versus how Microsoft offers and packages its cloud software application in Europe. The business has actually likewise submitted a problem versus Microsoft of a comparable nature with Germany’s own antitrust authorities.

In a article dated 18 May 2022, Microsoft president and vice-chair Brad Smith stated the business was taking “significant action” on the grievances being raised versus it, consisting of the adoption of 5 promises that it declares will form its technique to doing company in Europe in years to come.

These promises consist of dedications to guaranteeing its “public cloud satisfies Europe’s requirements and serves Europe’s worths”, that its platforms are established to make sure “the success of European software application designers” which it will offer “assistance for European cloud suppliers” through collaboration.

The staying 2 promises made by Microsoft consist of a dedication to “guarantee our cloud offerings satisfy European federal governments’ sovereign requirements, in collaboration with regional relied on innovation suppliers” and a vow to “identify that European federal governments are controling innovation, and we will adjust to and support these efforts”.

According to Microsoft, these promises mark the start of the work it is doing to deal with regulative issues, and are meant to “assist all elements of our cloud organization, improve openness for the general public, and assist us to much better assistance Europe’s innovation requires”.

In addition, the business stated it was likewise taking actions to guarantee European cloud suppliers might “more quickly host a larger range of Microsoft items on their cloud facilities”.

It included: “This will make European cloud companies more competitive by allowing them to much better serve consumers.”

While these actions are “broad” they are likewise not “always extensive”, continued Smith. “As I stated in a video conference a couple of weeks ago with the CEO of a European cloud supplier, our instant objective is to ‘turn a long list of problems into a much shorter list of problems’.

” In other words, let’s move quickly so we can find out rapidly. Today we’re taking a huge action, however not always the last action we will require to take, and we anticipate continuing feedback from European cloud companies, consumers and regulators,” he included.

Speaking to Computer Weekly, Nextcloud CEO Frank Karlitschek stated the actions Microsoft was devoting to take were a sign of the pressure it is feeling in the wake of the grievances, however there is still more the business needs to be wanting to do.

” The primary concern here is that we have a super-dominant position from Microsoft … [It is] truly controling this entire market and this is not healthy,” he stated. “That’s not healthy for the free market, that’s not healthy for personal privacy and it’s not healthy for digital sovereignty for Europe. We desire the regulators to do something versus it to ensure there’s reasonable competitors and an equal opportunity.”

In regards to the follow-up action Nextcloud and the union want to see Microsoft take, Karlitschek stated a dedication from the business to make parts of its cloud stack open source would be a start.

” Across Europe, you have this motion towards digital sovereignty, where federal governments wish to be in control of their information and applications. If you are a federal government or a business and you utilize Microsoft or Google or Amazon’s service– even if it’s hosted in Europe– that’s still under United States jurisdiction since of the CLOUD Act,” he stated.

” This is what they’re attempting to fix here by offering other cloud service providers the alternative to hold this Microsoft stick, however clearly this is inadequate, since you still have a reliance to Microsoft since Microsoft is closed source.”

He continued: “Digital sovereignty would just feature open source software application. What it has actually proposed up until now is intriguing and is a relocation in the ideal instructions, in action to the pressure it is under, however this is inadequate.”

Data from IT market watcher Synergy Research Group in September 2021 shed some light on the effect the United States tech giant’s growing hang on the European market was having on the fortunes of regional cloud suppliers.

While the marketplace itself has actually grown almost fourfold given that 2017 to a worth of $8.8 bn, European cloud suppliers have actually seen their share of the marketplace fall from 27% to 16% throughout that very same period, although the profits these companies make has actually doubled throughout that time.

Computer Weekly likewise called OVHcloud for its take on Microsoft’s strategies, offered it has actually likewise raised an antitrust grievance versus the business with regulators in the past, and got the following declaration in reaction.

” Microsoft acknowledges the benefits of our problem and we can just be sorry for that it needs to go as far as mobilising the appropriate authorities to protect an equal opportunity in Europe, where competitors is both open and reasonable,” stated the declaration.

” We are now waiting to see the concrete execution conditions of these resolutions and stay dedicated to protecting an equal opportunity for the European cloud community.”

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