Microsoft's ongoing efforts to address antitrust concerns in Europe have encountered significant challenges, particularly in its dealings with the Cloud Infrastructure Service Providers in Europe (CISPE). Despite initial agreements aimed at fostering fair competition, recent developments indicate that Microsoft's commitments remain unmet, raising questions about the company's compliance and the broader implications for the European cloud market.
Background of the Antitrust Concerns
In November 2022, CISPE filed a complaint with the European Commission, alleging that Microsoft imposed higher charges for running its software on rival cloud platforms. This practice was perceived as an attempt to stifle competition by making it financially burdensome for customers to operate Microsoft software outside of its Azure ecosystem. The complaint highlighted concerns over Microsoft's licensing terms, which reportedly led to European businesses and public sector bodies incurring up to €1 billion annually in additional costs when opting for non-Azure cloud services.
Settlement and the Memorandum of Understanding
In July 2024, Microsoft and CISPE reached a settlement to address these concerns. Central to this agreement was Microsoft's commitment to develop a European-specific version of Azure, known as Azure Local, designed to provide CISPE members with the ability to run Microsoft software on their platforms at prices equivalent to those offered on Azure. This initiative aimed to level the playing field and promote fair competition within the European cloud market.
Additionally, Microsoft agreed to compensate CISPE members for lost revenues related to licensing costs over the preceding two years. To monitor the implementation of these commitments, the European Cloud Competition Observatory (ECCO) was established, tasked with providing independent oversight and ensuring that Microsoft's actions aligned with the terms of the settlement.
Missed Deadlines and Ongoing Challenges
Despite the clear framework established by the settlement, Microsoft has struggled to meet its obligations. The company missed the initial deadline to deliver Azure Local within the agreed timeframe, prompting further negotiations and raising concerns about its commitment to the agreement. In May 2025, ECCO published its second report, maintaining an "Amber" rating for Microsoft, indicating that while some progress had been made, significant concerns remained. The report noted that both Microsoft and CISPE acknowledged that Azure Local would not deliver the full set of features outlined in the agreement, leading to the conclusion of the first phase and the initiation of discussions for alternative solutions.
CISPE Secretary General Francisco Mingorance expressed disappointment over the unmet commitments but emphasized that this was not the end of the agreement. He highlighted the need for alternative, commercially equivalent solutions that would enable CISPE members and European cloud infrastructure providers to compete fairly while offering Microsoft's productivity tools to their customers.
Broader Implications and Industry Reactions
The challenges faced by Microsoft in fulfilling its commitments have broader implications for the European cloud market. Competitors, including Google, have raised similar concerns about Microsoft's practices. In September 2024, Google filed a formal complaint with the European Commission, accusing Microsoft of anticompetitive tactics in the cloud computing sector. Google alleged that Microsoft's licensing practices forced business customers to use its Azure cloud platform, thereby stifling competition and increasing costs.
Furthermore, Microsoft's actions have drawn criticism from various industry groups. The Open Cloud Coalition, a group campaigning for greater competition across the cloud market, responded to ECCO's report by stating that Microsoft's track record of delaying and offering superficial commitments to avoid real change was evident. They emphasized the need for robust antitrust action to level the playing field and ensure fair competition.
Microsoft's Response and Future Outlook
In response to the ongoing scrutiny, Microsoft has reiterated its commitment to complying with European laws, including the Digital Markets Act and competition regulations. Microsoft President Brad Smith emphasized the company's dedication to respecting local laws globally and outlined measures to address European concerns about U.S. tech dominance, particularly in cloud computing and data privacy. These measures include creating a European-led board for Microsoft's European data centers and pledging legal resistance against any foreign government orders to disrupt European cloud services.
Despite these assurances, the company's failure to meet its commitments under the CISPE agreement raises questions about its ability to navigate the complex regulatory landscape in Europe. As the July 10 deadline approaches for Microsoft to propose a commercially equivalent solution, the industry will be closely watching to see if the company can fulfill its obligations and restore trust among European cloud providers.
Conclusion
Microsoft's ongoing struggles to meet its antitrust commitments in Europe underscore the challenges faced by major tech companies operating in a highly regulated environment. The company's inability to deliver on its promises not only affects its relationships with European cloud providers but also has broader implications for competition and innovation within the cloud computing sector. As regulatory bodies and industry stakeholders continue to monitor the situation, it remains to be seen whether Microsoft can align its practices with European standards and foster a more competitive and fair cloud market.
Source: TechRadar Microsoft is fighting hard to avoid cloud antitrust claims in Europe