Microsoft hit by fresh round of cloud-focused anti-competitive behaviour complaints

Microsoft is facing the prospect of an anti-trust probe at the hands of another overseas competition watchdog, following a complaint filed by a Spanish startup-focused trade association.

The Spanish Startup Association (SSA) confirmed in a statement on Tuesday 7 May that it had filed a complaint with Spain’s National Markets and Competition Commission (CNMC) “in response to the restrictive practices observed in the cloud services market”, which it claims are “significantly affecting both cloud providers and clients within the startup ecosystem in Spain”.

The SSA, which represents the interests of more than 700 startups in Spain, said “anti-competitive behaviour by Microsoft had been detected in the [cloud] market during recent years”.

To this point, the organisation accused Microsoft of using its dominant position in the operating systems and productivity software market to “force the use” of its public cloud Azure, which – in turn – “[imposes] artificial barriers that limit startups’ ability compete fairly and competitively”.

As stated in the SSA’s statement: “These [anti-competitive] practices would include barriers to data portability or contractual conditions that restrict competition in software licenses, which would make it difficult or prevent the free choice of providers of these services, reducing the capacity for choice and flexibility that startups need to be able to be resilient, innovate and grow.”

The timing of the SSA’s compliant comes nearly six months after the CNMC announced plans in late November 2023 to analyse the state of the competitive landscape within the country’s cloud sector, coupled with a pledge to make a series of recommendations to encourage competition to thrive.

In its complaint, the SSA called on the CNMC to carry out an “exhaustive investigation” to determine the extent of Microsoft’s violations of the competition regulations, and to push through changes that would allow startups to thrive “without being hindered by monopolistic or anti-competitive practices”.

SSA president Carlos Mateo said cloud computing is “one of the most important technologies” when it comes to driving the digital transformation within different sectors” and “we believe that all companies should be able to compete in an environment of equality so as not be left behind”.

Mateo continued: “We believe that this is a crucial step to ensure that the cloud market in Spain is not only innovative, but also accessible and fair for all actors involved, especially for startups that are both the basis and the future of our digital economy.”

In response to the complaint, a Microsoft spokesperson said the company is committed to engaging with the Spanish startup community so that it can understand the concerns raised better.

“Microsoft provides choice and flexibility for our customers to switch to another cloud provider at no cost, and our licensing terms enable our customers and other cloud providers to run and offer Microsoft software on every cloud,” the spokesperson added. 

The complaint is the latest in a string of anti-competitive accusations directed Microsoft’s way in recent years, with the company’s activities in the cloud currently under investigation in the UK by the Competition and Markets Authority.

As previously reported by Computer Weekly, the company has also come in for similar criticism from the Cloud Infrastructure Service Providers in Europe (CISPE) trade body over allegations that Microsoft charges customers more for running its online productivity tools in competitors’ clouds.

When asked for a response to the news of the SSA’s complaint against Microsoft, a CISPE spokesperson said the case is another example of “Microsoft’s widespread and ongoing use” of unfair software licensing practices to “force” customers to use the Azure public cloud.

“What’s important about this case is that it has been filed by European cloud customers. Startups are essential to the vibrant digital economy that Europe needs and they should be free to innovate and build their businesses on whichever cloud infrastructure they choose,” the spokesperson said.

“Restrictive licensing terms that make it difficult or economically unsustainable to run essential Microsoft software on non-Microsoft clouds must be rapidly brought to an end. Regulators, whether national or European, have a vital role in forcing dominant software providers to offer fair terms for all customers.”