WASHINGTON, D.C. – Today, the Coalition for Fair Software (CFSL) Executive Director Ryan Triplette released the following statement in response to news of the settlement between Microsoft and the Cloud Infrastructure Services Providers in Europe (CISPE) who are in turn withdrawing their antitrust complaint against Microsoft.
“This settlement is Microsoft’s latest attempt to avoid regulatory scrutiny without addressing the underlying anticompetitive practices that impact millions of cloud customers worldwide. Even after this agreement is in place, Microsoft will continue to use its unfair software licensing practices to limit choice, drive up costs, and lock in customers. A settlement with some smaller European providers that excludes the vast majority of customers and cloud providers does nothing to address Microsoft’s global anti-competitive behavior.
“Ongoing complaints and investigations in the UK, throughout the EU, the US, and in other countries clearly demonstrate Microsoft’s widespread pattern of anticompetitive behavior and the need for comprehensive solutions that apply to all cloud customers. The Coalition will continue to call for the broad adoption of the Principles of Fair Software Licensing and work with global regulators to protect customer choice.”
CISPE’s original complaint stemmed from Microsoft’s series of changes in 2019 that made it more difficult and expensive for customers to bring previously purchased Microsoft software to cloud providers other than Azure. These changes also created a new subset of Listed Providers, which includes Microsoft’s direct competitors in the cloud.
CISPE announced a series of “red lines” when it first entered negotiations with Microsoft in 2023. And they were reiterated when Microsoft and CISPE re-opened negotiations in 2024. They include:
- Any agreement must be principle-based and apply to all cloud infrastructure providers operating in Europe.
- Any agreement must benefit all customers in Europe. Any business must have the right to run the software they license on the cloud of their choice, without financial or technical penalties.
- Any settlement must be transparent and clear, open to scrutiny, future-proof and auditable for compliance over time.
Microsoft has failed to meet these requirements in today’s settlement.
The Coalition described Microsoft’s anti-competitive practices in a comment responding to the Request for Information by the Federal Trade Commission (FTC) on business practices in cloud computing. It has been one year since the Coalition requested the FTC investigate Microsoft’s anticompetitive licensing practices, and Microsoft has faced growing tide of regulatory scrutiny globally.
- In June 2024, the European Commission issued their Statement of Objections against Microsoft abusing its market dominance. The impetus of this investigation originated with Slack Technologies’ complaint in 2020 alleging that Microsoft illegally ties its Teams product to its market-dominant Office productivity suite. The Statement of Objections is a formal step in the Commission’s investigation into Microsoft’s suspected violation of EU rules and competition law.
- In June 2024, the United Kingdom (UK) Competition Markets Authority (CMA) Cloud Inquiry Group published interim working papers on its investigation into the supply of public cloud infrastructure services in the UK. In its Licensing working paper, the CMA notes its emerging views that “Microsoft’s licensing practices may affect customers’ choice of cloud provider.”
- In May 2024, the Spanish National Markets and Competition Commission (CNMC) opened a public consultation on cloud services in response to a complaint by the Asociación Española de Startups (Spanish Startups Association, AES) regarding Microsoft’s anticompetitive cloud practices.
- In March 2024, the French legislator enshrined fair software licensing for cloud customers in French law. The new French Digital Safety Law (the SREN) includes specific mention of this issue and requires that the French competition authority opens an investigation.
- In February 2024, the European Commission announced it was probing Microsoft for preventing customers from using competitors’ services, including cybersecurity solutions.
- In October 2023, the U.K. Competition and Markets Authority (CMA) announced a market investigation, including an examination of restrictive software licensing.
- In July 2023, the European Commission opened a formal investigation into the company’s tying of Teams with Office 365 and Microsoft 365.
- In March 2023, German antitrust regulators opened an investigation into the disproportionate power of Microsoft’s digital ecosystem across markets.
About the Coalition for Fair Software Licensing
The Coalition for Fair Software Licensing is a North American-based initiative seeking to unlock greater customer choice, innovation, and security in the cloud by advocating for the Principles of Fair Software Licensing. Our members span a cross-section of key industries, including healthcare companies, financial services businesses, as well as cloud and cybersecurity providers – each one has experienced or been exposed to anticompetitive and abusive software licensing practices in the cloud. Together, we are taking a stand against these predatory practices by advocating for the Principles of Fair Software Licensing to ensure more choice, innovation, and security in the cloud. To learn more about the Coalition for Fair Software Licensing, please visit FairSoftwareLicensing.com.