Microsoft faces new EU antitrust complaint on cloud computing practices

BRUSSELS, Nov 9 (Reuters) – Microsoft (MSFT.O) faces a new antitrust complaint over its cloud computing practices as trade group CISPE, of which Amazon (AMZN.O) is a member, filed its complaint on Wednesday submitted to the antitrust authorities of the European Union.

CISPE has claimed that Microsoft’s new contract terms, imposed on October 1, along with other practices, are irreparably damaging Europe’s cloud computing ecosystem.

Amazon is the market leader in cloud computing, followed by Microsoft and Alphabet unit Google.

“Microsoft is leveraging its dominance in productivity software, limiting choice and increasing costs as European customers seek to move to the cloud, distorting Europe’s digital economy,” CISPE Secretary-General Francisco Mingorance said in a statement.

The company is using its dominance in productivity software to lure European customers to its Azure cloud infrastructure, to the detriment of European competitors, CISPE claimed in its complaint to the European Commission.

It alleged that Microsoft’s anti-competitive practices included discriminatory bundling and tying of its products, self-preference pricing, and locking customers in at both technical and competitive levels.

Microsoft, which has been fined more than €1.6 billion ($1.6 billion) by the Commission for various antitrust violations over the past decade, has previously said it is making its software available to all customers, including rivals Cloud provider offers.

Cloud service providers in Germany, Italy, Denmark and France, two of which are members of CISPE, have submitted similar complaints to the Commission in recent years.

Microsoft then amended licensing agreements and other changes to make it easier for cloud service providers to compete starting Oct. 1 to address EU antitrust concerns.

However, competitors (AMZN.O), Alphabet’s (GOOGL.O) Google, Alibaba (9988.HK) and Microsoft’s own cloud services are exempt from the changes.

CISPE said the EU competition regulator should address the issue by applying to Microsoft the fair software licensing principles set out by the trade body last year.

It said an independent European observatory could be set up to examine the licensing terms of the dominant software companies.

The commission could also add another provision to newly enacted technical regulations, known as the Digital Markets Act, that would ban cloud computing gatekeepers from giving preference to their software applications, CISPE said.

($1 = 0.9909 euros)

Reporting by Foo Yun Chee. Editing by Jane Merriman

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