The European Union‘s antitrust arm is looking into Microsoft Corp.’s Azure cloud business because it is worried that the US software company is using its market power to squeeze out competitors.
According to reports, regulators are interviewing rivals and customers as part of an informal investigation into how Microsoft may be abusing its access to business-sensitive information belonging to cloud firms with which it does business.
EU antitrust enforcers want to know if they use this private information to compete with other cloud service providers on the market, said two people familiar with the matter who spoke on the condition of anonymity.
A number of complaints from cloud companies, like CISPE, an industry group connected to Amazon.com Inc.’s Amazon Web Services, led to this review. The investigation is happening at the same time that Microsoft is trying to get governmental approval around the world for its $69 billion purchase of Activision Blizzard Inc., the company that made the hit game Call of Duty.
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Investigative Action Against Antitrust
In reaction to the European Commission’s questions, answers are due by May 16, and non-confidential versions of evidence are due by the end of the month. This is usually a sign that an official antitrust investigation is about to start.
A formal probe could result in big fines. But regulators can settle investigations before they get to that point or drop cases if their original worries aren’t true.
Earlier complaints against Microsoft came from several European cloud providers, such as the French company OVH Cloud, the Italian company Aruba, the Danish Cloud Association, and the German cloud service Nextcloud.
Microsoft dominates the cloud market
This happened after Google Cloud said in March 2023 that Microsoft was using practices that hurt competition in the cloud computing market. The Vice President of Google Cloud, Amit Zavery, said that Microsoft’s deals with a few European cloud providers were bad and asked EU antitrust officials to look into them.
In answer, Microsoft pointed to a blog post from May of last year in which company president Brad Smith said that it was “healthily number two” in the global cloud services market with just over 20% of the revenue share. A Microsoft spokesperson also said that the company is still committed to the growth of the European Cloud Community.
Zavery, on the other hand, said that their anti-competitive behavior goes beyond the cloud. He said that the company might use its dominance in on-premise business, Office 365, and Windows to tie Azure and other cloud services together, making it hard for users to choose other providers.
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The Way Ahead
As EU antitrust regulators look into Microsoft’s cloud practices, the company is about to face a very important time. The results of this informal investigation and a possible official one could have big effects not only on Microsoft but also on the cloud computing industry as a whole, which is becoming more competitive and important to business today.
