Key Points:
- Microsoft settles for 20 million euros ($21.7 million) to address an antitrust complaint from CISPE.
- CISPE, including Amazon and other EU cloud providers, filed the complaint in late 2022 against Microsoft’s licensing terms.
- Microsoft will create a product allowing CISPE members to run Microsoft software on their platforms at equivalent prices.
- Microsoft will compensate CISPE members for lost revenues related to licensing costs over the past two years.
Microsoft (MSFT.O) has successfully negotiated a 20-million-euro ($21.7 million) settlement to address an antitrust complaint regarding its cloud computing licensing practices, thereby avoiding a potential European Union (EU) antitrust investigation and substantial fines. The complaint was initially raised by the Cloud Infrastructure Services Providers in Europe (CISPE), including major players such as Amazon (AMZN.O) and smaller European cloud providers.
CISPE filed the complaint with the European Commission in late 2022, alleging that Microsoft’s contractual terms, implemented on October 1, were detrimental to Europe’s cloud computing ecosystem. Despite being behind Amazon in the cloud computing market, Microsoft leads Alphabet’s (GOOGL.O) Google Cloud in the industry, which has been under antitrust scrutiny on both sides of the Atlantic.
Brad Smith, Microsoft’s President, expressed satisfaction with the resolution, stating, “After working with CISPE and its European members for more than a year, I am pleased that we’ve not only resolved their concerns of the past but also worked together to define a path forward that brings even more competition to the cloud computing market in Europe and beyond.”
As part of the agreement, Microsoft will develop a product that allows CISPE members to run Microsoft software on their platforms using the U.S. tech giant’s Azure cloud infrastructure at prices equivalent to Microsoft’s pricing. Microsoft has a nine-month timeline to deliver this solution. Additionally, Microsoft will compensate CISPE members for lost revenues related to their licensing costs over the past two years, although specific financial figures were not disclosed. According to sources, Microsoft’s total compensation is around 20 million euros.
The settlement does not encompass major competitors like Amazon Web Services (AWS), Google Cloud Platform, and AliCloud, which has drawn criticism from AWS and Google. An AWS spokesperson emphasized their continued support for customers and providers globally, advocating against Microsoft’s discriminatory practices. Amit Zavery, head of Google Cloud, also expressed hope that regulatory bodies would persist in scrutinizing Microsoft’s licensing practices to protect the cloud market from anti-competitive behavior.
Despite these criticisms, CISPE has agreed to withdraw its EU complaint and refrain from initiating or supporting similar complaints in Europe and elsewhere. Francisco Mingorance, CISPE’s Secretary General, noted, “This agreement will provide a level playing field for European cloud infrastructure service providers and their customers.”
