Software King of the World Microsoft has defended itself against allegations of anti-competitive behaviour in its cloud licensing practices, accusing competitors Amazon and Google of obfuscating the issues at hand.
This comes in response to the Competition and Markets Authority’s (CMA) ongoing investigation.
In a detailed 27-page rebuttal to the CMA’s June 2024 working paper, Microsoft challenges the interim findings that suggest its cloud software licensing strategy may undermine competition in the UK cloud infrastructure services market.
The CMA’s report had raised concerns that Microsoft’s practices could be inflating costs for enterprises using its licenses on rival cloud platforms, potentially stifling competition.
The CMA’s working paper highlighted that Microsoft’s licensing terms might make a significant portion of customer demand less contestable for its rivals, weakening its ability to scale and compete effectively in the cloud infrastructure market.
The UK cloud infrastructure services market stakeholders were invited to comment on the CMA’s interim findings. Among the respondents were Microsoft and its competitor Google. Google’s six-page submission argued that Microsoft’s licensing practices raise rivals’ costs and hinder their ability to compete, calling for urgent remedial action.
Microsoft’s response, authored by legal representatives from Latham & Watkins, refutes these claims, asserting that its intellectual property licensing terms do not significantly raise the costs for cloud rivals. Microsoft contends that Amazon Web Services (AWS) and Google Cloud Platform (GCP) have sufficient financial resources to compete effectively, citing their substantial capital expenditures as evidence of their robust market positions.
The response criticises AWS, GCP, and the Cloud Infrastructure Service Providers in Europe (CISPE) trade association for allegedly spreading misinformation about Microsoft’s licensing practices. CISPE, a vocal critic of Microsoft’s policies, recently withdrew an anti-trust complaint against Microsoft as part of a $22 million settlement with the European Commission.
Microsoft’s submission concludes by urging the CMA to dismiss concerns about its licensing practices, arguing that they do not significantly impact competition. The company asserts that the CMA has ample grounds to reject these concerns as lacking merit.
This development underscores the ongoing tensions in the cloud infrastructure market, as major players vie for dominance amidst increasing regulatory scrutiny.
