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Microsoft Faces European Regulatory Scrutiny Over Competitive Practices

CIO Insider Team | Friday, 18 March, 2022
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A French cloud computing firm has filed an antitrust lawsuit in Europe against Microsoft Corp., adding to previous criticism of the company's competitive practices at a time when other tech titans have been subjected to regulatory scrutiny.

Microsoft's software, according to the complaint, does not work as effectively on alternative cloud providers, making it more difficult for them to compete.

Microsoft hasn't been the focus of attention as governments around the world go after big tech giants. When the US Department of Justice and the European Union sued the company for its business practices two decades ago, the company had learnt from its own antitrust battles.

The other four major US digital behemoths—Facebook-owned Meta Platform Inc., Google-parent Alphabet Inc., Apple Inc., and Amazon.com Inc.—have been the focus of the government inquiry. The 2020 report of the US House Antitrust Subcommittee, for example, focused its 16-month investigation on the market strength of those four other corporations, rather than Microsoft.

While the European cloud market is expanding, much of that growth has gone to Microsoft, Amazon, and Google Cloud, the three major cloud vendors in the US

Policymakers and legislators in Europe have recently taken steps to tighten regulation of the cloud sector. Despite its lack of a significant cloud market share, Microsoft continues to combine its previous strengths in areas like business applications with its quickly rising cloud business. Microsoft got into controversy in the 1990s when it bundled the practices into its operating systems.

Microsoft is accused of bundling cloud products in an anti-competitive manner in two other recent European lawsuits. Slack Technologies Inc., a San Francisco-based business-messaging platform, filed a complaint with the European Union in 2020, claiming that Microsoft was bundling its rival Teams' workplace-collaboration tool with its popular Office suite. Last year, Nextcloud, a German cloud storage startup, filed a complaint with the European Union against Microsoft's OneDrive storage offering being bundled with the Windows operating system.

While the European cloud market is expanding, much of that growth has gone to Microsoft, Amazon, and Google Cloud, the three major cloud vendors in the US. According to Synergy Research Group, they now account for 69 percent of the European cloud market. According to Synergy, Deutsche Telekom is the top European cloud provider, with a two percent market share, followed by OVHCloud with a one percent market share.



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