Microsoft has nine months to stop another antitrust battle from escalating

Microsoft has reached a settlement with an industry group backed by European cloud infrastructure providers, quelling an antitrust battle that could have embroiled it for years and resulted in fines. But if Microsoft doesn’t live up to its end of the deal within the next nine months, the group has promised to revive its antitrust complaint with the European Commission.

The group, Cloud Infrastructure Service Providers in Europe (CISPE), agreed to withdraw its 2022 Complaint to the European Commission, where he accused Microsoft of “irreparably damaging the European cloud ecosystem and depriving European customers of choice in their cloud implementations.” This discussed at the time that Microsoft’s licensing terms “exacerbate harm and introduce new forms of binding, lock-in, and removal of choice for customers.”

Under the terms of the new agreement, Microsoft will allow European cloud providers to offer their applications and services on local cloud infrastructures, according to CISPE. The group complained that Microsoft unfairly blocked customers and sidelined competitors by effectively charging a “tax” for popular Microsoft products when used outside of its own cloud service, Azure. With the new version of Azure Stack HCI for European cloud providers announced in the agreement, customers of these other cloud providers will have access to Windows 11-based virtual desktop infrastructure, free extended security updates, and pay-as-you-go licensing for SQL Server.

The group also said it would create an independent European Cloud Observatory (ECO), made up of Microsoft, cloud infrastructure providers in Europe and European customer associations. The ECO will issue regular assessments, reports and recommendations on how the agreement is implemented. Microsoft will also pay CISPE an undisclosed amount to cover the costs of litigation and fair software licensing campaigns over the past three years. Reuters reported the business is in the millions.

CISPE also said it would not initiate or support further complaints on the subject of the agreement, although it may still respond to requests for information from regulators.

The group lists Amazon Web Services alongside several smaller European providers among its members, although it said AWS was excluded from negotiations. AWS, Google Cloud Platform and AliCloud are not included in the agreement.

CISPE Secretary General Francisco Mingorance called the deal a “significant victory for European cloud providers” in a statement alongside the announcement. But another Group linked to Amazon which criticized Microsoft’s cloud licensing practices, closed the deal. Coalition for Fair Software Licensing Executive Director Ryan Triplette said in a statement: “This agreement is Microsoft’s latest attempt to avoid regulatory scrutiny without addressing the underlying anti-competitive practices affecting millions of cloud customers around the world. . Even after this agreement goes into effect, Microsoft will continue to use its unfair software licensing practices to limit choice, increase costs and drive away customer loyalty.”

Microsoft President Brad Smith said in a statement that the company has been working with CISPE for over a year and is “I am pleased that not only have we resolved their past concerns, but that we have worked together to define a path forward that brings even more competition to the cloud computing market in Europe and beyond.”