Microsoft eases cloud terms to avoid full EU antitrust probe
Microsoft is easing the commercial terms of its cloud computing service in a bid to assuage complaints from rivals and avoid a full antitrust investigation in Brussels.
The move follows concerns from competing cloud providers that Microsoft is using anti-competitive practices to lure customers to its Azure cloud computing platform and away from competitors.
Margrethe Vestager, the EU’s executive vice-president for competition and digital policy, confirmed last month that Brussels was “actively following up” a complaint about Microsoft’s cloud services practices.
On Wednesday, Microsoft Chairman Brad Smith said the tech giant was taking “very broad but not comprehensive” steps as it sought to address concerns from regulators and competitors.
Smith said the changes introduced were “based on feedback” he had received from several cloud providers across Europe.
In a blog post, he wrote, “Some of the most compelling comments for me came from a CEO who said he felt ‘the victim of friendly fire in Microsoft’s competition with Amazon.’ It was hard to hear, but he was right.
Microsoft’s latest move stands in stark contrast to the aggressive stance taken by the company when it faced competition complaints more than two decades ago.
When asked if he had been scarred by antitrust investigations in previous years, Smith replied, “Yeah, but stronger because of that or at least better because of that.” He added that “your scars make you older and wiser”.
At the heart of rivals’ concerns was a change to Microsoft’s licensing terms made in October 2019. The change affected how the company charges for products like Office when they run in Microsoft data centers. ‘Amazon Web Services, Google and Alibaba, so-called hyperscale cloud services that compete with Azure.
Under the new terms, customers will not be required to purchase an additional license if they have already purchased Microsoft’s cloud services. These new rules only apply if the services are transferred to a European cloud provider and not to US competitors such as AWS and Google cloud services.
Smith said that in its fight against AWS, which dominates the cloud market, Microsoft overlooked the effects that some of its terms of business had on its cloud provider customers.