(Bloomberg) – European regulators are asking Microsoft Corp partners and competitors to for information related to a complaint against the software manufacturer alleging anti-competitive behavior in the market for cloud computing services.
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The European Commission distributed a questionnaire in March, seen by Bloomberg News, that focused on how Microsoft licenses its products. The questions could lead to a formal investigation and follow an antitrust complaint by French company OVH and two other cloud providers to the European Union’s antitrust authority last year about Microsoft’s conduct.
The questionnaire asks respondents whether they have signed agreements to participate in Microsoft programs that allow other partners and cloud providers to resell Microsoft programs, as well as questions about whether the company is making it more difficult or expensive to own some of its programs Competitors operate networks of cloud providers.
“We can indeed confirm that the Commission received the complaint,” said a spokesman for the European Commission. “At this time we are unable to share any further information about this.”
Microsoft – the manufacturer of market-leading Office and Windows software – is also the world’s second largest provider of cloud infrastructure and leases computing power and storage space that is delivered to customers over the Internet. Amazon.com Inc. is the largest provider of such services, and Alphabet Inc.’s Google is trying to snag Microsoft. As companies increasingly mix and match vendor programs or use multiple clouds, OVH and others claim that Microsoft’s software license terms put them at a disadvantage when running Microsoft products, making it easier or cheaper to pair things like Windows, Office, and Windows Server with Microsoft’s own Azure cloud.
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“The cloud market is growing and European cloud providers have built successful business models with Microsoft software and services,” Microsoft said in an emailed statement. “We are continually evaluating how best to support partners and make Microsoft software available to customers in all environments, including those of other cloud providers.”
Microsoft has largely escaped global antitrust scrutiny from other big tech companies like Meta Platforms Inc., Apple Inc., Google and Amazon. But the European Union this month reached agreement on a new law that paves the way for billions of euros in fines and bans on the worst violators of a new digital markets law. The rules target so-called gatekeeper companies that have the power to control distribution in their markets. This includes Microsoft.
The request for information asks for details on whether Microsoft’s cloud-based Windows and Office products can run on the cloud products of its competitors, or whether Microsoft would have to “make technical adjustments” to enable this. And it asks if the respondent feels they need to include certain Microsoft products or services in their own cloud infrastructure offering “in order to compete effectively.”
The companies were also asked to compare the software license terms their customers receive with those Microsoft provides to its own customers through a program called the Azure Hybrid Benefit Program. It gives customers a discount for running certain Microsoft products, like Windows Server, on Azure rather than another cloud provider. The companies have until April 7th to answer the questionnaire.
The questionnaire likely forms part of the commission’s first investigative exercise, said Richard Pepper, a partner at Macfarlanes LLP. “At this point it is too early to make a meaningful assessment of whether this will take action. Nonetheless, this is definitely an area of focus for the Commission.” Microsoft previously faced more than a decade of antitrust battles with the European Union, which ended in 2009 with the company agreeing to give Windows users a choice of web browsers. The Redmond, Washington-based software maker also paid €1.68 billion in filing in EU antitrust cases before that date.
(Updates with Microsoft’s statement in sixth paragraph.)
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