Cloud, who criticizes and why Microsoft in Europe
European cloud companies urged Margrethe Vestager, EU antitrust commissioner, to bring enterprise software vendors such as Microsoft, Oracle and Sap back into the scope of the DMA
European cloud companies sound alarm: Microsoft shouldn't avoid digital crackdown.
Bloomberg headlines, reporting the news of the appeal launched by 41 European cloud provider companies.
In an open letter sent earlier this week to competition commissioner Margrethe Vestager, 41 members of Cispe, (the European association that brings together cloud computing companies), urgently asked for clarification on the draft law on digital markets Digital Markets Act (Dma).
European companies urge the EU executive to ensure that corporate software (such as that provided by Microsoft) clearly falls within the scope of the regulation.
“Today it is essential that DMA includes clear remedies to stop unfair practices by software gatekeepers. Small clarifications are all that is needed to close this critical gap ”, reads the letter.
And it's not the first time that the Redmond tech giant has come under the lens of the EU for its cloud service.Last May, the European Data Protection Supervisor (EDPS) opened two investigations into the use by EU institutions of cloud services provided by Amazon and Microsoft.
All the details.
WHAT THE EUROPEAN CISPE ASSOCIATION REQUIRES
“We are facing an urgent situation. Monopoly software vendors are once again using their dominance to lock down customers, forcing them to use the cloud infrastructure they provide. This abuse of software licenses means that other smaller cloud infrastructure providers can't compete. This includes innovative European cloud companies that are being excluded from their market ”. This is what we read in Cispe's letter, first reported by Bloomberg .
TOWARDS THE APPROVAL OF THE DMA
Together with the Digital Services Act, the Digital Markets Act is on the table of the trilateral discussion between the European Commission, Parliament and Council.
In the crosshairs of the rules approved by MEPs there are digital companies that take on the role of so-called 'gatekeeper', that is to control access to online services by citizens, such as social networks, search engines, operating systems, online advertising services, cloud computing and video sharing services.
COMPANIES CONCERNED
Member States and the European Commission have argued that DMA should affect companies with a market capitalization of at least € 65 billion. This threshold would capture far more than the five largest US tech companies (Google, Facebook, Amazon, Apple and Microsoft), each worth over $ 1 trillion.
To re-enter the role of gatekeeper, according to the DMA, it will also be necessary to be present in at least three EU countries and have at least 45 million monthly end users, as well as more than 10,000 corporate customers.
In case of violation of the rules, the sanctions proposed would be "not lower than 4% and not higher than 20%".
MICROSOFT, ORACLE AND SAP SHOULD ALSO BE IN THE SCOPE OF DMA
However, the European cloud companies signing the letter fear that the language and examples are not explicit enough to ensure legal clarity for their industry.
A lack of specificity could also be exploited by tech giants to file lawsuits in an attempt to evade or delay DMA's ex ante obligations.
WHAT HAD EMERGED FROM A REPORT COMMISSIONED BY CISPE
To reinforce their thesis, the European member companies of Cispe had commissioned a report last October.
The report, commissioned by CISPE with the support of Cigref, and written by Professor Frédéric Jenny, professor emeritus at ESSEC Paris Business School and chairman of the OECD Competition Committee, finds indications that established players including Microsoft, Oracle and SAP could using improper licensing practices to limit choice and harm competition for cloud infrastructure services.
Specifically, the report argues that Microsoft leverages bundling tactics to win tenders (often after initially losing) by offering its cloud infrastructure, Azure, for free with upcoming product license renewals. In this way the software company carries out a control action on the access to the cloud.
THE INVESTIGATION OF THE EU GUARANTOR
Finally, if European cloud provider companies fear the monopolistic attitudes of technology giants such as Microsoft, there are those who are also wondering about data security.
Last May, the European Data Protection Supervisor (EDPS) launched two investigations into the use of cloud services provided by the US-based Amazon Web Services and Microsoft.
The European Data Protection Supervisor said EU bodies are increasingly relying on cloud software and infrastructure or cloud-based platform services from large American vendors. Just like Microsoft and Amazon Web Services. The latter are subject to legislation that allows disproportionate surveillance activities by the US authorities. In fact, in the United States, the “Cloud Act” has been in force since 2018. The latter may allow the American justice or intelligence services to access data hosted outside the United States in some cases.
“I am aware that the cloud contracts were signed in early 2020 – before the ruling on the Schrems II case – and that both Amazon and Microsoft announced new measures with the aim of aligning their business with what was established. Nonetheless, these may not be sufficient to ensure complete compliance with European data protection laws, hence the need to investigate properly ”said Wojciech Wiewiórowski, Edps number one.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/cloud-chi-critica-e-perche-microsoft-in-europa/ on Sun, 13 Feb 2022 14:22:31 +0000.