Spanish startups are raising red flags over Microsoft’s cloud computing practices. The Spanish Startup Association, representing over 700 Spanish startups, filed an antitrust complaint against Microsoft with the Spanish regulator on Tuesday. This move echoes a similar complaint filed by a European trade group last November.
The Complaint: Stifling Competition in the Cloud
The crux of the complaint lies in allegations that Microsoft is abusing its dominant market position in operating systems (Windows) and productivity software (Office) to unfairly steer customers towards its Azure cloud service. Startups claim Microsoft erects “artificial barriers” that hinder their ability to compete on a level playing field. These barriers reportedly include:
- Data portability hurdles: Startups struggle to seamlessly transfer data between platforms, hindering their ability to migrate to or integrate with non-Microsoft cloud solutions. This creates vendor lock-in, forcing startups to remain dependent on Microsoft’s ecosystem.
- Contractual terms that favour Microsoft: The complaint alleges that Microsoft’s software licensing agreements contain clauses that disadvantage competitors. These clauses could restrict startups’ ability to negotiate favourable terms with other cloud service providers or limit their access to certain features and functionalities.
- Restrictions on cloud provider choice: Startups argue that Microsoft’s practices limit their options when selecting cloud service providers. This could involve bundling cloud services with other Microsoft products or making it difficult for startups to integrate with competing cloud platforms.
The association argues that these practices stifle innovation and growth for startups. By limiting their ability to choose the most suitable cloud solutions based on their needs and budget, startups are hindered in their ability to compete effectively. The Spanish Startup Association urges the Spanish authorities to launch a thorough investigation and take steps to ensure a fair and competitive cloud computing market that fosters a level playing field for all businesses, regardless of size or market share.
Microsoft’s Cloud Ambitions
Microsoft, currently the second-largest player in cloud computing behind Amazon, is rapidly closing the gap. The company’s strategic integration of OpenAI’s generative AI technology is proving to be a major draw for businesses, further accelerating its cloud growth trajectory. However, Microsoft’s dominance in other software segments is raising concerns that the company might be leveraging its existing market power to gain an unfair advantage in the cloud arena.
International Scrutiny of Microsoft’s Cloud Practices
The Spanish complaint is just the latest in a growing chorus of international concerns regarding Microsoft’s cloud practices. Last November, a European cloud industry trade group called CISPE (which includes Amazon among its members) filed a similar complaint with EU regulators. Additionally, both the European Commission and the UK Competition and Markets Authority are currently investigating the cloud computing sector, with a focus on potential anti-competitive practices by major cloud service providers.
