Microsoft Secures EU Cloud Antitrust Settlement Defying €470 Million Google Offer to CISPE

Google sought to influence a group of European cloud companies with a €470 million financial incentive to prevent their settlement with Microsoft. The Cloud Infrastructure Services Providers in Europe (CISPE) had earlier lodged a complaint, accusing Microsoft of anticompetitive software licensing practices. CISPE’s Antitrust Allegations European cloud service providers under CISPE accused Microsoft of bundling its software with Azure cloud services, making it challenging for customers to migrate to other providers, thereby stifling competition. The complaint aimed to secure fairer access to Microsoft’s software tools. CISPE and Microsoft resolved their dispute through an agreement, leading to the withdrawal of the antitrust complaint. The settlement is intended to ensure fairer access to Microsoft’s software for CISPE members, mitigating the competitive restrictions previously in place. This $21.7 million arrangement spares Microsoft from a protracted and costly antitrust probe by EU regulators. Google’s Counteroffer Bloomberg reports that Google attempted to disrupt this settlement with a substantial financial package of €470 million, urging CISPE to maintain their antitrust action against Microsoft. However, CISPE rejected Google’s offer, favoring direct negotiations with Microsoft over extending the legal confrontation. Several cloud providers, including Google, voiced their discontent with the settlement. Amit Zavery, head of platform at Google Cloud, criticized Microsoft’s strategy, arguing that addressing complaints financially without resolving underlying issues negatively impacts businesses. Google’s proposal involved doubling Microsoft’s payments and offering nearly half a billion Euros in software benefits to CISPE members over five years. AWS’s Involvement Amazon Web Services, also a CISPE member, supported Google’s offer. An AWS spokesperson expressed the company’s commitment to supporting CISPE in promoting software freedom on their chosen cloud. Despite this, the majority of CISPE members chose Microsoft’s settlement, wary that accepting Google’s proposal might embroil CISPE in the ongoing competition between tech giants. Microsoft aims to address the issue within nine months, potentially benefiting the cloud ecosystem by making its software more accessible to all European cloud providers. A source close to Google noted that this settlement underscores Microsoft’s substantial market power.