Experts have warned that the Competition and Markets Authority’s (CMA’s) current investigation into Microsoft’s cloud software licensing strategy should be concerning for the company. Despite this, Microsoft insists that its actions are not affecting its competitors, Amazon Web Services (AWS) and Google Cloud.
A recent 102-page working paper published by the UK competition watchdog delves into concerns about Microsoft’s cloud licensing practices. Ofcom and overseas trade bodies have previously accused Microsoft of charging customers more for running software in competitors’ clouds and for opting to run software made by other providers in its Azure public cloud.
The CMA is considering how Microsoft’s licensing practices may harm competition in the UK cloud infrastructure services market. Microsoft faces accusations of making software licenses more expensive for rival cloud infrastructure compared to Azure, potentially raising rivals’ costs and making customer demand less contestable.
While Microsoft insists that its licensing terms allow customers to run its software on any cloud provider, the CMA’s findings suggest that many customers view Microsoft’s pricing strategy as favorable for Azure. The CMA is exploring remedies, such as non-discriminatory pricing and improved price transparency, to address potential competition issues.
Market stakeholders are encouraged to provide feedback on the working paper by 27 June 2024. The findings have sparked strong reactions from industry experts, with calls for Microsoft to address the CMA’s concerns and promote fair competition in the cloud market.
Overall, the working paper sheds light on the potential impact of Microsoft’s licensing practices on competition and highlights the need for further investigation and potential regulatory action.