Microsoft Pays €20 Million to Settle with European Cloud Computing Rivals, Aiming to Avoid EU Litigation
Brook.X
Years after facing antitrust complaints in the EU for leveraging pricing strategies in server product licenses like Windows Server to disadvantage competitors, Microsoft has agreed to pay €20 million in settlement fees to these competitors, primarily to avoid litigation by the European Union.
The Cloud Infrastructure Services Providers in Europe (CISPE), formed by Amazon and several smaller European cloud computing providers, aims to collectively address Microsoft's unfair competition practices.
CISPE had previously lodged complaints with the EU, accusing Microsoft's cloud computing practices of negatively impacting the competition and demanding an antitrust investigation into Microsoft Azure.
Microsoft's alleged unfair competition practices revolve around licensing bundling and using products like Windows Server to give Azure an unfair advantage, thereby attracting more cloud computing customers or encouraging them to switch from other platforms to Azure.
To potentially avert an EU investigation, Microsoft announced this week it would pay CISPE €20 million in settlement fees. Additionally, Microsoft will offer European cloud computing providers enhanced Azure Stack HCI, multi-session virtual desktop infrastructure based on Windows 11, free extended security updates, and a pay-as-you-go licensing for SQL Server.
Brad Smith, Microsoft's President and Chief Legal Officer, stated:
After over a year of collaboration with CISPE and its European members, we are pleased to not only address their past concerns but also work together to chart a way forward, bringing more competition to the cloud computing market in Europe and beyond.
However, reaching a settlement with CISPE does not mean the antitrust complaints are resolved, as Amazon did not participate in these negotiations. Although not leaving CISPE, Amazon did not reach an agreement with the other members.
Amazon AWS has expressed its intention to continue standing with customers, suppliers, and regulatory bodies worldwide, calling for Microsoft to cease its discriminatory practices (primarily pricing discrimination based on whether Azure is used).
Similar to the EU's lawsuit against Microsoft's unfair competition with Microsoft Teams, the settlement with CISPE may not suffice to satisfy the EU, which will likely continue its investigation into Microsoft until a decision to prosecute or not is reached.
