CMA cloud licensing: Microsoft accuses Google and AWS of ‘muddying’ anti-trust debate

[Pelican Press 0]

This is the hidden content, please

• Sign In
• or
• Sign Up

CMA cloud licensing:

This is the hidden content, please

• Sign In
• or
• Sign Up

accuses

This is the hidden content, please

• Sign In
• or
• Sign Up

and AWS of ‘muddying’ anti-trust debate

This is the hidden content, please

• Sign In
• or
• Sign Up

’s response to the Competition and Markets Authority’s (CMA) ongoing investigation into its cloud licensing practices has seen it accuse arch-rivals

This is the hidden content, please

• Sign In
• or
• Sign Up

and

This is the hidden content, please

• Sign In
• or
• Sign Up

of “muddying the waters” with their contributions to the probe.

The software giant has issued a 27-page response to a working paper the CMA published in June 2024 that detailed the interim findings of the CMA’s investigation into

This is the hidden content, please

• Sign In
• or
• Sign Up

’s cloud software licensing strategy, which contained anti-competitive concerns about its tactics.

As reported by Computer Weekly at the time, CMA said it had received evidence that

This is the hidden content, please

• Sign In
• or
• Sign Up

’s behaviour could be serving to weaken competition in the *** cloud infrastructure services market by making it more expensive for enterprises to run

This is the hidden content, please

• Sign In
• or
• Sign Up

licenses in other providers’ clouds.

“

This is the hidden content, please

• Sign In
• or
• Sign Up

’s licensing practices may [also] have the effect of making a significant portion of customer demand less contestable to rivals,” the CMA working paper said. “Over the longer term, this may weaken rivals’ ability to acquire sufficient customers to benefit from scale advantages in supplying cloud infrastructure services.”

*** cloud infrastructure services market stakeholders were invited to provide their feedback on the CMA’s interim findings, and

This is the hidden content, please

• Sign In
• or
• Sign Up

– along with its cloud rival

This is the hidden content, please

• Sign In
• or
• Sign Up

– are among the parties to have done so.

This is the hidden content, please

• Sign In
• or
• Sign Up

’s submission runs to six pages, and states: “

This is the hidden content, please

• Sign In
• or
• Sign Up

’s licensing practices both raise rivals’ costs and weaken rivals’ ability to compete for a significant portion of customer demand, and constitutes a clear adverse effect on competition.

“The CMA’s evidence underlines the urgent need for remedial action to address [areas of concern]. We support the CMA’s emerging views on potential remedies and believe there are straightforward ways to prevent

This is the hidden content, please

• Sign In
• or
• Sign Up

causing further damage to competition in this important market.”

This is the hidden content, please

• Sign In
• or
• Sign Up

’s submission, authored by representatives from Latham & Watkins law firm, rebukes this view and opens with the statement that: “

This is the hidden content, please

• Sign In
• or
• Sign Up

’s IP licensing terms do not meaningfully raise cloud rivals’ costs.”

This is in response to a concern flagged by the CMA that

This is the hidden content, please

• Sign In
• or
• Sign Up

’s licensing practices might force its rivals

This is the hidden content, please

• Sign In
• or
• Sign Up

Web Services (AWS) and

This is the hidden content, please

• Sign In
• or
• Sign Up

Cloud Platform (GCP) to “meaningfully” raise their operating costs to such an extent that there is a risk of “genuine foreclosure”.

The latter is a term used to describe practices and strategies that prevent a company’s rivals from accessing or participating in new markets, and effectively shutting them out of the competition.

But, as stated in its response,

This is the hidden content, please

• Sign In
• or
• Sign Up

does not think its actions are having that level of effect on AWS or GCP.  

“

This is the hidden content, please

• Sign In
• or
• Sign Up

and

This is the hidden content, please

• Sign In
• or
• Sign Up

appear from all accounts likely to have ample margin (cash) to play with and compete profitably,” the

This is the hidden content, please

• Sign In
• or
• Sign Up

response stated. “

This is the hidden content, please

• Sign In
• or
• Sign Up

and

This is the hidden content, please

• Sign In
• or
• Sign Up

surely have sufficient war chests of available margin to compete today.

“

This is the hidden content, please

• Sign In
• or
• Sign Up

and

This is the hidden content, please

• Sign In
• or
• Sign Up

are investing $50bn and $30bn in capex, which demonstrates their committed ‘money where your mouth is’ belief in a profitable and competitive future in cloud. These are not the actions of maginalised or weakened rivals struggling to compete with the burden of compensating

This is the hidden content, please

• Sign In
• or
• Sign Up

for making profitable use of its [intellectual property] at (hyper) scale.”

Elsewhere in the response,

This is the hidden content, please

• Sign In
• or
• Sign Up

takes aim at AWS, GCP, the Cloud Infrastructure Service Providers in Europe (CISPE) trade association and “others” for spreading misinformation about how its licensing practices could be allegedly having an adverse effect on competition in the market.

CISPE has previously been a vocal opponent to

This is the hidden content, please

• Sign In
• or
• Sign Up

’s licensing practices, which it has repeatedly described as “unfair”, but the pair have called a truce of sorts in recent weeks.

As reported by Computer Weekly on 11 July 2024, CISPE agreed to withdraw a long-standing anti-trust complaint it made against

This is the hidden content, please

• Sign In
• or
• Sign Up

to the ********* Commission as part of a $22m agreement.   

“In summary,

This is the hidden content, please

• Sign In
• or
• Sign Up

observes that the waters were, and remain, muddied by

This is the hidden content, please

• Sign In
• or
• Sign Up

,

This is the hidden content, please

• Sign In
• or
• Sign Up

, CISPE and others about the correct [adverse effects on competition] and how it is to be answered,” the response stated.

AWS has, incidentally, previously taken aim at

This is the hidden content, please

• Sign In
• or
• Sign Up

’s licensing practices in a submission to the CMA, filed at the start of July 2024, with the public cloud giant accusing

This is the hidden content, please

• Sign In
• or
• Sign Up

of using its legacy technologies to distort how the cloud infrastructure services market operates.

“Unlike

This is the hidden content, please

• Sign In
• or
• Sign Up

, most of the other IT providers tend not have ‘must-have’ legacy software that could be leveraged to distort competition to the detriment of customers,” the AWS submission stated.

“Indeed, licensing practices should not be leveraged to artificially restrict customer choice and make switching more difficult.”

This is the hidden content, please

• Sign In
• or
• Sign Up

then went on to “respectfully suggest” in the conclusion to its response that its “licensing practices do not come close to raising

This is the hidden content, please

• Sign In
• or
• Sign Up

’s or

This is the hidden content, please

• Sign In
• or
• Sign Up

’s costs in a manner or level remotely consistent with an adverse effect on competition”, and that the CMA should dismiss any concerns raised about its licensing practices.

“The CMA has ample grounds to dismiss these concerns as lacking merit for the purposes of a provisional adverse effect on competition finding, let alone a robust finding on the balance of probabilities,” it added.

This is the hidden content, please

• Sign In
• or
• Sign Up

#CMA #cloud #licensing #

This is the hidden content, please

• Sign In
• or
• Sign Up

#accuses #

This is the hidden content, please

• Sign In
• or
• Sign Up

#AWS #muddying #antitrust #debate

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up