The big three cloud service providers – Amazon Web Services, Microsoft Azure and Google Cloud – account for nearly three-quarters of the European cloud market, according to data released by Synergy Research Group.
And while all three companies have been the subject of various EU antitrust investigations over the years, their respective cloud businesses have yet to feel the full force of European competition law.
That said, the European Commission (EC) has been investigating Microsoft for anti-competitive practices after complaints were filed by rival cloud service providers last year, including Germany’s Nextcloud and France’s OVHcloud.
Read more: Microsoft faces cloud-based antitrust complaints in Italy, Denmark
No formal investigation has since been launched, but the implementation of changes to Microsoft’s outsourcing and hosting terms in October was widely perceived as an attempt to appease EU antitrust concerns.
The revised terms are intended to make it easier for users of Microsoft software products to deploy them on non-Azure cloud servers and are part of Big Tech’s previous commitments to support European cloud providers.
However, the recent amendments weren’t enough to stop the trade association Cloud Infrastructure Services Providers in Europe (CISPE) from filing another complaint with the European Commission earlier this month, arguing that the new terms not only fail to address the market abuse of Microsoft, but add new malpractices to their contractual requirements.
“Microsoft’s current position and behaviors are irreparably damaging the European cloud ecosystem and depriving European customers of choice in their cloud deployments,” CISPE said, urging the EC to launch a formal investigation.
In addition to Microsoft, CISPE has also brought charges of restrictive licensing agreements against Oracle and SAP.
While Azure has come under fire from rivals in the cloud delivery space, Microsoft has also been accused of unfairly bundling products together with another of its cloud services: OneDrive.
An EU-based consortium of IT companies has added its support to a complaint Nextcloud filed with the EC, alleging that Microsoft limits consumer choice and creates barriers for other market participants by “aggressively pushing” OneDrive, Teams and other services on Windows users.
In both cases, software developers who want to market and sell their products to Microsoft customers have accused the company of monopolistic practices that prevent third parties from freely interfacing with Microsoft services either through restrictive contracts or by making it prohibitively difficult to do so.
Many of the companies that joined Nextcloud’s OneDrive claim would also benefit from Azure’s open legal and technical requirements, while companies like Cozycloud and Aquaray are in the same boat as AWS, being in direct competition with Microsoft in the market for cloud hosting services .
Related: The EC proposes to change the market definition to consider digital ecosystems
The United Kingdom opens an investigation into the cloud market
What’s interesting about the latest development is that the CISPE counts AWS among its members, suggesting that the global leader in the cloud market is confident it would benefit from a cloud ecosystem where developers have more flexibility to combine cloud services from different vendors .
But while AWS may feel confident it would benefit from a more open cloud market, UK communications regulator Ofcom named all three cloud providers Big Tech in its preliminary market survey.
In a request for input, the regulator pointed to Synergy research which suggests the dominance of the big three providers is even more pronounced in the UK than in Europe as a whole, taking around 81% of sales of country’s public cloud infrastructure in 2021.
After closing the public consultation, Ofcom will conduct a market study over the next year, with a final report to be published by 5 October 2023.
The regulator says it will “explore the extent of interoperability between services from different vendors, how easy it is for customers to move their workloads and data between vendors, and how easy it is for customers to switch vendors or use more than one vendor. ”
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