Microsoft’s preliminary response to the European Union’s antitrust concerns raised by competitors has been deemed inadequate, according to German software firm Nextcloud. The company claims that further action is necessary from the US tech giant while EU regulators deliberate over the potential for a formal investigation.
Additionally, French cloud service provider OVHcloud, one of the complainants, is awaiting a more detailed proposal from Microsoft, as confirmed by a source familiar with the situation.
Addressing these grievances could assist Microsoft in avoiding an EU antitrust probe, which might result in fines of up to 10 percent of the company’s global revenue.
Nextcloud lodged its complaint with the European Commission in 2021, claiming that Microsoft is misusing its market power by integrating its OneDrive cloud storage service with the Windows 10 and 11 operating systems.
Microsoft has faced over €1.6 billion (approximately ₹13,980 crore) in antitrust penalties within the EU over the past decade. A year ago, the company reached out regarding the complaints but did not address the bundling issue, according to Nextcloud’s Chief Executive, Frank Karlitschek.
“I am open to further discussions, but they would need to be substantive,” Karlitschek stated in an interview with Reuters.
The complaints filed by OVHcloud, Italian cloud provider Aruba, and a Danish cloud service association revolve around Microsoft’s practices in the cloud market and its licensing agreements.
In response, Microsoft announced changes to its licensing practices in October of the previous year, stating these modifications were made in light of feedback from European cloud providers.
“We appreciate the constructive discussions that led to these changes and value the feedback received,” a Microsoft spokesperson commented.
Both Aruba and the Danish Cloud Community declined to provide further comments on the situation.
A representative from the trade group CISPE, which lodged a complaint regarding Microsoft’s cloud operations with the European Commission last year, noted that Microsoft reached out recently to discuss potential changes.
CISPE’s member companies include Amazon.com, a leading player in the cloud computing market.
© Thomson Reuters 2023
