EU Starts Antitrust Investigation of Microsoft Azure

Microsoft has just won a major antitrust victory in the EU, but it could soon face antitrust troubles of a different kind: Bloomberg reported today that the European Commission (EC) has started “an informal probe” of Microsoft Azure to determine whether the software giant is up to its old tricks and “leveraging its market power to squeeze out rivals.”

This new probe is unrelated to and separate from an EU antitrust probe of Microsoft’s bundling of Teams with the Office suite in Microsoft 365. That investigation was prompted by a complaint by Slack in 2020, and in recent months, we’ve learned that the software giant has offered to unbundle Teams from Office to avoid charges. (You can read more about my thoughts on that case here.)

In this new case, Bloomberg has seen documents from the EU that state that regulators are questioning Microsoft’s customers and competitors to determine whether the firm is “abusing its access to business-sensitive information belonging to cloud firms it has commercial dealings with. EU antitrust enforcers want to know whether Microsoft then leverages such confidential information to compete with cloud-service providers on the market, said two people familiar with the matter, who spoke on condition of anonymity.”

As with the Teams investigation, this one was kicked off by competitors: Following complaints from OVH Cloud, Aruba, and Nextcloud, CISPE, an industry group tied to Amazon AWS, issued its complaint against Azure in November 2022.

“Microsoft uses its dominance in productivity software to direct European customers to its own Azure cloud infrastructure to the detriment of European cloud infrastructure providers and users of IT services,” CISPE alleged. “The market share of European cloud infrastructure providers has halved in the last 5 years even as the overall market has grown. Microsoft’s share of the same market has outperformed all other players who kept stable market shares, growing at the expense, we believe, of European providers, by more than 800%. If allowed to continue, these abuses will inevitably lead to the demise of a European cloud infrastructure sector.”

Customers and competitors contacted by the EC have until May 16 to respond, and they’ve been asked to submit any non-confidential evidence of Microsoft’s abuses as well. This, Bloomberg says, indicates that the EC is close to announcing a formal investigation.

“The commission has received several complaints regarding Microsoft, including in relation to its product Azure, which we are assessing based on our standard procedures,” an EC statement reads.