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Google’s €470 Million Offer Fails to Deter EU Cloud Firms from Settling with Microsoft

By  |  July 16, 2024

Google attempted to sway a group of EU cloud firms with a package valued at approximately €470 million ($512 million) to maintain their antitrust complaint against Microsoft Corp., Bloomberg reported. This effort, however, did not succeed — the firms chose to settle with Microsoft instead.

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    Cloud Infrastructure Services Providers in Europe (CISPE) had previously lodged a complaint with the EU’s antitrust authorities, alleging that Microsoft’s software licensing practices made it overly difficult for customers to switch cloud providers. They argued that Microsoft unfairly tied its business software to its Azure cloud services, effectively stifling competition.

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    Last week, CISPE withdrew this complaint after negotiating a deal with Microsoft that promises fairer access to its technologies. This settlement permits service providers to offer Microsoft applications and services on their local cloud infrastructures and includes a financial contribution of €10 million from Microsoft.

    Just days before this settlement with Microsoft in the EU was finalized, Alphabet Inc.’s Google made a counteroffer to CISPE, according to confidential documents and sources familiar with the matter, who spoke anonymously to Bloomberg. Google’s proposal included €455 million in software licenses for Google Cloud over five years and an additional €14 million in cash, aiming to form a long-term partnership. This offer was contingent on CISPE continuing its antitrust complaint against Microsoft.

    In addition to Google’s substantial offer, Amazon Web Services (AWS) contributed approximately €6 million as part of its ongoing partnership with CISPE. AWS, a founding member of CISPE, has a history of making voluntary contributions to the association, which supports its efforts to promote fair competition in the cloud market.

    Despite these generous offers, CISPE’s member firms chose to accept Microsoft’s terms. The deal with Microsoft includes access to enhanced Azure features and the ability to offer Microsoft applications on local cloud platforms, addressing CISPE’s concerns over licensing practices and fostering a more competitive environment.

    AWS commented on the matter, stating, “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.”

    Source: Bloomberg