Microsoft to pay off cloud industry group to end EU antitrust complaint

Microsoft is closing in on a multimillion-euro deal with Amazon-backed cloud lobby CISPE to get it to drop an antitrust complaint, according to two industry officials with knowledge of the proposal.

This would see the group of cloud providers withdraw a request for the European Commission to investigate Microsoft’s cloud-licensing agreements, shutting down a potential antitrust standoff.

The deal hasn’t yet been accepted by members of the Cloud Infrastructure Services Providers in Europe (CISPE), said the people, who were granted anonymity to discuss sensitive negotiations.

The pact would include a possible multimillion-euro payment to the trade association, they said. One said separate payments could also be made to individual companies.

As part of any settlement, CISPE and its members would also agree not to file legal complaints against Microsoft in any country worldwide.

Brad Smith, Microsoft’s president, will meet the EU’s antitrust chief Margrethe Vestager when he visits Brussels on June 4 for talks on competition and artificial intelligence.

Microsoft said it continues “to work constructively with CISPE to resolve concerns raised by European cloud providers.” The company declined to comment on the size of any potential agreement.

CISPE said in a statement that “discussions with Microsoft are ongoing, and proposals have been made. However, no agreement has been reached.”

The Brussels-based cloud trade association urged the European Commission in 2022 to investigate Microsoft for allegedly abusing its power over software licensing terms.

Brad Smith, Microsoft’s president, will meet the EU’s antitrust chief Margrethe Vestager. | Pool Photo by Thibault Camus via Getty Images

The cloud lobby said the company’s anti-competitive practices led to discriminatory pricing and locked customers into services, effectively preventing them from moving to rival cloud providers. Microsoft has denied those allegations.

CISPE currently receives financial support from Amazon, one of Microsoft’s global competitors in the cloud computing industry, in an increasingly bitter lobbying battle between the two American tech giants.

Amazon declined to comment.

While the European Commission has asked questions about the issue, it hasn’t moved to open a formal antitrust investigation.

Microsoft has been trying to resolve the issue, making changes to cloud licensing last year.

In February, CISPE confirmed it had “opened discussions” with Microsoft to resolve the dispute, but stressed that “any remedies and resolution must apply across the sector and to be accessible to all cloud customers in Europe.” That would include those of its biggest member, and cloud market leader, Amazon.