Microsoft initiates changes to limit Brussels investigation into its cloud business

Following accusations of practices of abuse of dominant position targeting the attitude of Microsoft on the cloud market, the company reacts. In a blog post published on May 18, 2022, Microsoft President Brad Smith tries to make amends.

As a reminder, a coalition of around thirty companies and associations is leading the charge against Microsoft’s position in the collaborative tools sector (online storage, videoconferencing, etc.). An antitrust complaint has been filed with the European Commission and the German competition authority. Microsoft could be subject to a formal review by the European Commission. In almost 10 years, he has received fines totaling around 1.6 billion euros for breaches of competition law.

Simplified Licensing

“While not all of these claims are valid, some of them are, and we will absolutely be making changes soon to address them.”, said at the time of the first outcry Brad Smith. Today he presents two initiatives: a set of five principles for managing the Microsoft cloud in Europe, and the implementation of one of these principles through an initiative to support European cloud providers so that they can more easily host a wider variety of Microsoft products on their own infrastructure.

In practice, Microsoft is committed to helping European cloud providers directly offer Windows and Office (including Windows 11 and Microsoft 365) as part of a complete office solution that they can build, market and host on their cloud infrastructure. They will also be able to provide this same service to customers who purchase Windows and Office software from other Microsoft partners but want a European cloud provider to host that software for them.

Brad Smith also mentions Microsoft’s desire to simplify the licenses and write them more clearly so that the cost is easily determinable. These license agreements will be revised to allow its customers to use their licenses on any European cloud provider. And customers will now be able to purchase licenses only for a virtual environment without having to purchase hardware. Changes that come three years after Microsoft decided to charge more for running its software on third-party hosts. The Redmond firm, which explains this by competing with AWS and Google, which can do the same thing, is therefore going back for European cloud providers.

Rather political principles

In this long blog post, Microsoft also lists 5 main principles: Microsoft’s public cloud must meet Europe’s needs and support its values; the Microsoft cloud must provide a platform for the success of European software developers; Microsoft is committed to working with and supporting European cloud providers; Microsoft is committed to delivering cloud offerings that meet the sovereign needs of European governments through partnerships with local technology providers; Microsoft “acknowledges” that European governments regulate the technology and will adapt.

These principles seem mostly to be a policy and lobbying tool for Microsoft. The real change will come from the practice and in particular the modification of its licenses. But will that be enough?

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