What you need to know
- A South African-based agency is reportedly set to look into Microsoft over its cloud computing licensing practices.
- According to a source familiar with the issue, the case is quite similar to the one Microsoft is currently facing against the EU regulator, which forced it to unbundle Teams from Office 365 globally.
- Microsoft responded via email addressing the issue and indicated that it wasn't aware of a case filed against it over cloud computing business practices from South Africa.
Microsoft can't seem to catch a break this week. First, it was forced to unbundle Microsoft Teams from its Office 365 package worldwide after Salesforce-owned Slack complained to the EU Commission, citing anti-competitive practices. And as it now seems, the tech giant has landed itself into more antitrust-related issues.
According to a report by Reuters, a South African antitrust agency is expected to investigate Microsoft's cloud computing licensing practices. A source with knowledge of the matter disclosed that the South African case is similar to the European Union antitrust case in many aspects.
Strangely enough, while making a statement regarding the issue via email, Microsoft categorically indicated that it wasn't aware of any case filed against it by the South African-based agency.
Microsoft is no stranger to cloud computing controversies and rivalry
While details about this issue remain slim, Microsoft is no stranger to accusations from rivals in the cloud computing landscape. In 2022, trade group CISPE complained about Microsoft to the European Union watchdog, indicating that its then newly imposed contractual terms and other "unfair practices" were negatively impacting the cloud computing ecosystem in Europe.
The trade group shared the following sentiments as the basis for its complaints:
"Leveraging its dominance in productivity software, Microsoft restricts choice and inflates costs as European customers look to move to the cloud, thus distorting Europe's digital economy."
Elsewhere, Amazon and Microsoft are under scrutiny by the Competition and Markets Authority for limiting competition through its "hyper-scale" services in the cloud computing market, which account for roughly 60% to 70% of total cloud spend per Ofcom's report.
These practices make it extremely difficult for UK-based businesses to switch to other cloud providers or even use multiple cloud services. Google echoed these sentiments when it sent a letter to the UK's Competition and Markets Authority (CMA), petitioning it to take action against Microsoft's anti-competitive business practices in cloud computing.
