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June 1, 2024

Microsoft Nears Settlement with EU Cloud Industry Group to Resolve Antitrust Complaint

Microsoft is reportedly on the verge of a multimillion-euro agreement with the Cloud Infrastructure Services Providers in Europe (CISPE), an Amazon-backed industry group, to drop an antitrust complaint with the European Commission. This prospective settlement, though still pending acceptance by CISPE members, marks a significant development in the ongoing dispute over Microsoft’s cloud licensing practices.

The proposed deal involves CISPE withdrawing its request for an investigation into Microsoft’s cloud-licensing agreements, which the group had claimed were detrimental to the European cloud computing landscape. The complaint, initially lodged in late 2022, was rooted in concerns that Microsoft’s revised contractual terms, introduced on October 1, 2022, were stifling competition and disadvantaging European cloud service providers.

According to industry officials familiar with the proposal, the settlement could see Microsoft making a substantial financial payment to the trade association, potentially amounting to several million euros. Additionally, there might be separate payments to individual member companies within CISPE. These financial terms are intended to address the grievances raised by the group and facilitate a resolution.

The agreement also reportedly includes a clause that would prevent CISPE and its members from initiating further legal complaints against Microsoft on a global scale. This element of the settlement is crucial as it aims to bring a comprehensive end to the dispute, ensuring that similar issues do not arise in other jurisdictions.

Neither Microsoft, Amazon, CISPE, nor the European Commission have provided comments on the report, which was initially disclosed by Politico. This lack of response has left some details of the negotiation and the potential settlement terms unconfirmed as of now.

CISPE’s membership comprises Amazon and 26 smaller cloud providers within the European Union. The group has been vocal about its concerns that Microsoft’s licensing practices could harm the competitive dynamics within Europe’s cloud computing sector. The antitrust complaint emphasized that the new terms imposed by Microsoft were perceived as unfairly benefiting the tech giant at the expense of other providers.

The origins of this settlement can be traced back to February, when Reuters first reported that Microsoft and CISPE were engaged in discussions to resolve the antitrust complaint. These talks have now evidently progressed towards a concrete agreement, signaling a possible end to the dispute that has drawn significant attention within the tech industry.

If finalized, this settlement would be a noteworthy example of a major technology company reaching a financial and legal compromise to address regulatory and competitive concerns within the European market. It underscores the growing scrutiny of large tech firms’ business practices in the region and the increasing willingness of industry groups to challenge these practices through regulatory channels.

The outcome of this case may also influence how other tech giants approach their licensing agreements and competitive strategies within the EU, potentially leading to more balanced and equitable conditions for smaller providers. As the details of the settlement become clearer, it will be interesting to observe the broader implications for the cloud computing industry and the regulatory environment in Europe.

Read more Business related news on R9 News
Jhumpa Lahiri

Jhumpa Lahiri

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