Exclusive-Microsoft must do more to resolve antitrust issues, rivals say

5:14 pm Thursday, March 23rd, 2023

By Foo Yun Chee

BRUSSELS (Reuters) – Microsoft Corp’s initial offer to address EU antitrust complaints filed by rivals is insufficient and the U.S. software giant needs to do more, German software provider Nextcloud said, as regulators consider whether to open a formal investigation.

French cloud computing services provider and complainant OVHcloud is also waiting for a more concrete proposal from Microsoft, a person with direct knowledge of the matter said.

Resolving the complaints with the companies could help Microsoft stave off a possible EU antitrust investigation that could lead to a fine as much as 10% of its global turnover.

Nextcloud took its grievance to the European Commission in 2021, alleging that Microsoft abuses its dominance by bundling its OneDrive cloud storage service with its Windows 10 and 11 operating system.

Microsoft, which has been hit with more than 1.6 billion euros ($1.7 billion) in EU antitrust fines in the previous decade, reached out a year ago but did not talk about the bundling issues, Nextcloud Chief Executive Frank Karlitschek said on Wednesday.

“I would be interested in more talks but it would have to be a serious conversation,” he told Reuters.

The complaints by OVHcloud, Italian cloud service provider Aruba and a Danish association of cloud service providers focused on Microsoft’s cloud practices and licensing deals.

Microsoft said it introduced changes to its licensing practices in October last year that addressed feedback received from European cloud providers.

“We are grateful for the productive conversations that led us there and appreciate the feedback that we have received since,” a Microsoft spokesperson said.

Aruba and the Danish Cloud Community declined to comment.

A spokesperson for trade group CISPE which filed a complaint about the company’s cloud computing practices to the Commission last year, said Microsoft reached out last week offering to discuss changes.

Cispe’s members include cloud computing market leader Amazon.com Inc .

($1 = 0.9211 euros)

(Reporting by Foo Yun Chee; Editing by Richard Chang)