Microsoft's cloud business hit with antitrust lawsuit in Europe
The complaint focuses on Microsoft's licensing operations
French cloud computing company OVHcloud, along with other European tech firms, has filed an antitrust case in Europe against Microsoft Corp, alleging that the tech giant is stifling competition in the cloud market and making it harder for its consumers to choose cloud services from rival firms.
As reported by Reuters, two other European cloud provided have joined the complaint, which was filed in the summer of 2021, but their identities are not known.
The complaint focuses on Microsoft's licensing operations. It alleges that Microsoft has made it more expensive for users to move from Azure to another cloud service offered by rival firms. It also claims that Microsoft's software does not perform as well when used on their platforms, making it difficult for other cloud providers to compete with Microsoft.
OVHcloud said that by exploiting its dominant position in the cloud computing services industry, Microsoft has been undermining fair competition and limiting consumer choice.
A Microsoft spokesperson responded to the complaint by stating that cloud providers have a lot of alternatives when it comes to providing cloud services to their clients using Microsoft software, whether bought by the customer or the partner.
"The cloud market is growing, and European cloud providers have built successful business models using Microsoft software and services.
"We're always thinking about how we can better serve partners and make Microsoft products accessible to consumers in a variety of settings, including those provided by other cloud providers," the spokesperson added.
Although the cloud industry in Europe continues to expand, Microsoft Azure, AWS and Google Cloud, all of which are based in the United States, account for a major part of that growth. According to Synergy Research Group, these three companies currently account for 69 per cent of the European cloud market.
Significant growth in cloud pushed Microsoft to a better-than-expected profit of $18.8 billion in the quarter ended 31st December (Q2'22): up 21 per cent year-on-year (YoY). The company's overall cloud revenue rose 32 per cent YoY to $22.1 billion, with Azure cloud infrastructure service growing 46 per cent YoY.
In Europe, Deutsche Telekom is currently the top European cloud provider, with a 2 per cent market share, followed by OVHcloud, which has a 1 per cent market share.
OVHcloud, which sells cloud computing, web hosting and dedicated server instances, is currently trying to position itself as a European alternative to cloud companies located in the United States and China.
It offers customers to deliver services that comply with European privacy legislation and European clients' desire to keep data local, out of reach of foreign security agencies.
As for Microsoft, it was already the subject of a lawsuit filed with the European Commission competition watchdog. On-premises collaboration platforms supplier NextCloud filed the complaint last year, complaining of Microsoft's practise of bundling OneDrive and other services with Windows.
Last year, the EU antitrust regulator also asked customers and rivals of Microsoft and Nuance Communication, a transcription firm, to submit inputs on Microsoft's proposed $19 billion acquisition of Nuance.
The regulator is specifically interested to know about any possibility that Microsoft will favour Nuance over competing services after the deal is completed.