Microsoft seeks to dodge EU cloud computing probe with changes

Microsoft Chairman Brad Smith reacts during an interview with Reuters at the Web Summit, Europe’s biggest technology conference, in Lisbon, Portugal November 3, 2021. REUTERS/Pedro Nunes/Files

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BRUSSELS, May 18 (Reuters) – Microsoft (MSFT.O) will revise its licensing agreements and make it easier for cloud service providers to compete, its chairman Brad Smith said on Wednesday, as the U.S. software giant sought to dodge a long EU antitrust procedure. investigate its cloud computing business.

Microsoft has been fined 1.6 billion euros ($1.7 billion) by EU antitrust regulators over the past decade for various violations.

The company again found itself under the scrutiny of the European competition authority after the German software provider NextCloud, the French OVHcloud (OVH.PA), the Italian cloud service provider Aruba and a Danish association of Cloud service providers have complained to the European Commission about Microsoft’s cloud practices. Read more

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Microsoft was taking the first step, but not the last, to address the concerns, Smith told a conference organized by the Bruegel think tank in Brussels.

He recounted the “extraordinary defeat” Microsoft faced in a challenge to the EU’s antitrust body in 2007 that forced it to change.

Microsoft wants to listen and act on complaints, Smith said.

“It really starts with giving European cloud providers more options. So if there’s a business that has a data center but wants to run solutions in their cloud PBX data center, we create more options so they can do it with our software, because that’s what they’re asking for,” he said.

Microsoft will help cloud providers directly offer Windows and Office as part of a complete desktop solution that they can build, sell and host on their infrastructure.

It will revise license agreements and allow customers to use their licenses on any European cloud provider providing services to their own data centers. Customers will also be allowed to purchase licenses only for the virtual environment without having to purchase the physical hardware.

While some cloud service providers welcomed the news, others said it was not enough.

“Cloud adoption and the development of European digital capabilities are a priority for the European Union. Microsoft has a unique role to play in supporting this effort,” the European Cloud Alliance said in a statement.

CISPE rejected the decision and urged the EU’s antitrust watchdog not to relax its efforts.

“The initiative announced today fails to meaningfully address unfair licensing practices at the heart of complaints and concerns from cloud infrastructure service providers and customers across Europe,” CISPE Secretary General Francisco Mingorance said in a statement.

“It does nothing to end the anti-competitive tie of productivity suites to cloud infrastructure services,” he said.

Asked about workplace messaging app Slack’s 2020 complaint about Microsoft’s link between its Teams product and its Office productivity suite, Smith said the bundling fell into a different category, but didn’t. no details provided.

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Reporting by Foo Yun Chee; edited by Jason Neely and Bernadette Baum

Our standards: The Thomson Reuters Trust Principles.

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