European watchdog ECCO to monitor major software vendors
European cloud service providers have set up an independent ‘watchdog’ to fight unfair practices by software vendors. The European Cloud Competition Observatory (ECCO) aims to prevent distortions of competition in the European cloud market through monitoring. Cispe, the interest group of European cloud infrastructure providers, announced the creation of this independent body.
TEXT: ALFRED MONTERIE IMAGE: SHUTTERSTOCK
Microsoft in particular is accused of abusing its market power. According to Cispe, the vendor is increasingly intertwining products such as Microsoft 365 and Windows with its own Azure cloud and other services. This is crowding out other cloud players with their own SaaS services.
The reason for the creation of ECCO is the agreement Cispe reached with Microsoft last July on a fairer cloud software licensing environment in Europe. The monitoring body will help to focus on compliance with the commitments made by Microsoft. User interest groups will also be involved. In addition to Microsoft, ECCO will also monitor other major vendors, including Broadcom/VMware, whose practices limit cloud choice for European customers.
Microsoft in court
In the UK, Microsoft has already faced a lawsuit alleging that companies using competing cloud services from Amazon, Google and Alibaba should pay more for Windows Server licenses. Maria Luisa Stasi, a lawyer specialising in competition law, is taking Microsoft to court on behalf of digital rights interest group Article 19.
'Competition is unfairly restricted'
Article 19 is taking collective action on behalf of several thousand UK businesses. According to the lawyer, Microsoft is punishing customers for using other cloud services and trying to force them to use Azure. Stasi believes competition is unfairly restricted and is convinced UK businesses could collectively claim more than a billion pounds in compensation.
She is backed by Scott + Scott, a major law firm with offices in Amsterdam and elsewhere and expertise in tackling anti-competitive behavior. Stasi represents clients from Amazon, Google and Alibaba, but denies representing the interests of these Microsoft competitors.
Closely examined
Separately, the UK Competition and Markets Authority is investigating cloud computing, a market dominated by Amazon Web Services (AWS) and Microsoft Azure. Microsoft’s licensing practices, particularly for Windows Server and Microsoft 365 products, are being closely examined. According to Reuters, the US Federal Trade Commission (FTC) is investigating whether Microsoft is abusing its power by imposing strict licensing terms. This would hamper customers from moving from Azure to other platforms. •
