Microsoft vs CISPE: No agreement in cloud dispute

The Association of Cloud Infrastructure Services Providers in Europe (CISPE) has denied reports that an agreement in its antitrust dispute with Microsoft is imminent. Previously, the online magazine Politico had reported, citing insiders, that both sides had agreed on a multi-million dollar deal, in the course of which the European cloud providers would withdraw their antitrust lawsuit against the US hyperscaler.

These rumors are false, the news agency Reuters said Monday, quoting CISPE officials. Talks with Microsoft would continue. Proposals are already on the table on how the dispute could be resolved, it said. However, there could be no talk of an agreement.

Is Microsoft abusing its market power?

The dispute revolves mainly around how Microsoft is linking its products such as Microsoft 365 and Windows more and more closely with its Azure cloud and other services. It is almost impossible for competitors to compete with their own SaaS services, according to CISPE. In addition, Microsoft can always offer its software in its own Azure cloud at a lower price than competitors in its clouds, it says.

Competition is also hampered by the fact that Microsoft’s software does not work so well in the clouds of other providers. CISPE’s conclusion is that by abusing its dominant position, the software giant is undermining fair competition and restricting consumer choice in the cloud services market.

The dispute has been smoldering for years. In November 2022, CISPE officially filed a complaint against Microsoft with the European Commission’s Directorate-General for Competition. Despite Microsoft’s assurances that it would change its business practices, the corresponding initiatives have done nothing to solve existing problems, according to the accusation. On the contrary, instead of changing unfair licensing practices, Microsoft has introduced new, unnecessary and unfair practices.

Tough negotiations

For Microsoft, the main concern is likely to be to avert a lengthy investigation by the EU authorities, which could result in a potential fine as well as strict requirements regarding future business practices. Talks have been ongoing since February 2024. However, CISPE will not be fobbed off with lip service and empty attempts at appeasement, its officials made clear. Significant progress would have to be made in the first quarter of 2024, it had said. But the negotiations seem to be dragging on.

“Every day that passes without a solution being found further undermines the viability of the European cloud infrastructure sector and limits cloud options for European customers,” warned Francisco Mingorance, Secretary General of CISPE, a few months ago. The head of the association made it unmistakably clear that Microsoft must end its unfair software licensing practices in order to end the dispute.