Tech Giant Accuses Rival of Unfair Cloud Computing Practices
A major player in the tech industry has filed a complaint with the European Commission, alleging that a rival company is using unfair licensing contracts to stifle competition in the multibillion-dollar cloud computing market. The complainant claims that the rival company’s dominant position in the market, courtesy of its popular server and office software products, allows it to exert significant control over clients and make it difficult for them to switch to competing cloud infrastructure providers.
The complaint alleges that the rival company’s licensing terms contain restrictions that make it hard for customers to move their workloads to other cloud providers, despite there being no technical barriers to doing so. This has resulted in European businesses and public sector organizations being forced to pay up to €1 billion ($1.1 billion) annually in licensing penalties due to these restrictions.
The complainant cites a study by a trade body for the cloud computing sector, which found that the rival company’s practices have harmed cybersecurity and innovation in the industry. The study also found that the company acquired a significant majority of new businesses in a major European market in 2021 and 2022.
The head of platform at the complainant company stated that they believe the rival company is in violation of EU antitrust rules and that the restrictions in place do not allow customers to choose their preferred cloud provider. The complainant is seeking changes to the rival company’s cloud licensing terms to promote competition and innovation in the market.
In response to the complaint, the rival company stated that it had already settled similar concerns with the trade body and expects the European Commission to dismiss the complaint. The company denied that its cloud practices harm competition, stating that the cloud services market is functioning well.
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