Microsoft Settles with CISPE on Cloud Licensing Issues in EU

Microsoft will pay €20 Million to settle an antitrust complaint about its cloud computing licensing practices in the EU.

“After working with CISPE and its European members for more than a year, I am pleased that we’ve not only resolved their concerns of the past, but also worked together to define a path forward that brings even more competition to the cloud computing market in Europe and beyond,” Microsoft President Brad Smith said.

Cloud Infrastructure Services Providers in Europe (CISPE) is a European trade group representing smaller cloud providers. It complained to the European Commission about Microsoft’s licensing practices in 2022, arguing that it was using its dominance to prevent customers on Azure from switching to rival services.

Sensing a market opportunity, Microsoft’s chief cloud rivals, Amazon and Google, separately announced that they would halt the behavior that got Microsoft into trouble: Both now waive the so-called “exit fees” that made it prohibitively expensive to move off their infrastructures. Google, in particular, has been vocal about Microsoft, though it has supported a settlement.

And now it’s apparently happened.

“Microsoft’s playbook of paying off complainants rather than addressing the substance of their complaint hurts businesses and shouldn’t fool anyone,” Google vice president Amit Zavery says. “Many regulatory bodies have opened inquiries into Microsoft’s licensing practices, and we are hopeful there will be remedies to protect the cloud market from Microsoft’s anti-competitive behavior. We are exploring our options to continue to fight against Microsoft’s anti-competitive licensing in order to promote choice, innovation, and the growth of the digital economy in Europe.”

The details of Microsoft’s settlement remain sealed, but Google describes it as a “pay off” that provides payments to both the CISPE trade group and individual EU cloud companies. Oddly, the settlement doesn’t apply to all CISPE members, and those that agree to the settlement must “agree not to file legal complaints against Microsoft in any country worldwide.”

I assume we’ll get more details soon.