Google offered complainant €470 million to maintain Microsoft antitrust probe: Report

Alphabet’s cloud computing division, Google Cloud, tried to sustain the European Union’s inquiry into Microsoft’s antitrust practices in the cloud computing sector by offering complainant Cloud Infrastructure Services Providers in Europe (CISPE) a package worth €470 million ($511 million), Bloomberg reported.

The offer included €14 million in cash and software licenses worth €455 million over five years, Bloomberg said, and was made to CISPE on the condition that the cloud consortium would sustain its complaint against Microsoft alleging abusive practices in the cloud sector, Bloomberg said Tuesday, citing people familiar with the matter and confidential documents it had seen.

The development comes just days after CISPE settled with Microsoft and withdrew the complaint it had filed in November 2022 with the European Commission, the EU’s antitrust authority.

“Under a Memorandum of Understanding signed by both parties, Microsoft has committed to make certain changes to address the claims made by European CISPE members and, as a result, CISPE will withdraw its complaint against Microsoft,” the cloud consortium said in a statement following the withdrawal of its complaint on July 11.

“Amazon Web Services, a CISPE member, was excluded from these negotiations and it, along with Google Cloud Platform and AliCloud, will neither benefit from nor be bound by these terms,” it added.

Google denied making any such payments to CISPE. “Google Cloud has long supported the principles of fair software licensing. We were having discussions about joining as a member to help CISPE continue to fight against anticompetitive licensing and promote choice, innovation, and the growth of the digital economy in Europe,” a Google spokesperson said.

AWS on the other hand acknowledged supporting CISPE through financial contributions. “AWS is a founding member of CISPE and has regularly made voluntary contributions to CISPE. Enterprises across every major industry have long supported trade associations in similar ways. We simply reconfirmed our commitment to CISPE over the next few years to continue to support areas of shared interest, including fighting for every business to have the right to run the software they license on the cloud of their choice without financial or technical penalties,” an AWS spokesperson said.

AWS said the CISPE settlement with Microsoft does nothing to solve the antitrust issue. “Unfortunately, this settlement does nothing for the vast majority of Microsoft customers who are still unable to use the cloud of their choice in Europe and around the world. We continue to stand with the growing number of customers, providers, and regulators globally who are calling on Microsoft to end its discriminatory practices for all customers.”

Microsoft has been in talks with CISPE since February to sidestep what could have been a costly investigation by the European Commission.  

Just days after Microsoft said that it was attempting to resolve the issue with CISPE, Google along with AWS started protesting Microsoft’s anticompetitive cloud software licensing practices in the EU.

Although Microsoft may have found relief in the EU, it still continues to face inquiries over anticompetitive practices in the UK and the US.

Last year in December, AWS blamed Microsoft for anti-competitive practices in the cloud computing segment in a letter to the UK’s Competition and Markets Authority (CMA).

AWS’s letter came after the CMA launched an antitrust probe into Microsoft and Amazon’s cloud services in October.

The CMA probe was initiated after UK communications regulator Ofcom in July referred the cloud infrastructure market for investigation around anti-competitive practices in cloud computing to the CMA post the publication of an interim report.

In the US the Coalition for Fair Software Licensing has urged the Federal Trade Commission (FTC) to investigate Microsoft’s anticompetitive licensing practice.