Big Boost for Fair Software Licensing

May 15, 2024 | News

In spite of national holidays across Europe last week, it was a busy time for those campaigning for fair software licensing. Pressure is intensifying on software giants which seek to leverage legacy dominance in critical software sectors to enforce their will onto emerging cloud markets. Broadcom has already been forced to rethink its unprecedented changes to its licensing terms for VMware, and we hope will make further efforts to restore trust and fairness to the virtualisation sector. Meanwhile, Microsoft faces a new complaint in Spain.

Last Tuesday (7th May) the Spanish Start-Ups Association (Asociación Española de Startups, AES) announced that it had made a complaint against Microsoft with the Spanish competition authority, La Comisión Nacional de los Mercados y la Competencia (CNMC). What stands out about this complaint is that it is from a customer association representing 700 start-ups, many of which are ‘digital natives.’ This fast-moving and innovative sector relies on the cloud and it is vital that these businesses are free to run the productivity software they rely upon in the cloud of their choice.

The AES filed its complaint with its national regulator, the CNMC. At the same time, by coincidence or otherwise, the CNMC also announced a public consultation as part of its wide-ranging market inquiry into unfair practices in the cloud. Understanding that dominance in the market for productivity software can be leveraged to distort the cloud sector is growing. The UK’s Competition and Markets Authority (CMA), for example identified unfair software licensing as one of its four theories of harm for its Cloud Market Inquiry and the French legislator enshrined fair software licensing for cloud customers in French law in March.

At the same time, things are progressing in Brussels. CISPE was honoured to meet with Executive Vice President Vestager on Tuesday to discuss the status of our own complaint (Azure II) against Microsoft. This is one of four complaints against Microsoft currently active with the European Commission including the complaint from Slack on unfair bundling of Microsoft’s Teams collaboration software. The week ended with speculation from Politico, subsequently reinforced by the Financial Times, that Microsoft may soon receive a Statement of Objections – essentially formal charges – in that case.

Last week’s events underline the vital role of regulators in ensuring fair and competitive markets. We are glad to see regulators stepping in to help secure lasting and principle-based solutions to prevent dominant software companies from leveraging market power to undermine competition and seize control of the cloud infrastructure market and all the next generation technologies that depend upon it. Meanwhile, we continue to campaign for fair software licensing principles.

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