Nextcloud’s complaint about Microsoft’s anti-competitive behaviour linked to collaboration software shares common ground with the issues that CISPE and many others have identified as damaging to a competitive market for cloud infrastructure in Europe. Some legacy software companies continue to use exclusionary tactics inherited from the 1990s to leverage their longstanding dominance of software markets to distort the emerging cloud services markets, impacting both ‘Infrastructure as a Service’ and ‘Software as a Service’.
As NextCloud’s complaint alleges, and as further evidenced in a recent study by Prof. Jenny, legacy software giants use bundling, pre-installation, and a variety of financial and technical levers to limit customers’ ability to choose competing products. Some companies that dominated the previous era of desktop and on-premise data centre computing are desperately trying to leverage that market power to capture the emerging cloud services sector both on the software side and on the infrastructure side.
With concerns over data protection, data sovereignty, portability, and interoperability high on the European agenda it is vital that customers have a choice of a range of services that can closely match their individual requirements. A monoculture cloud infrastructure tightly integrated with software as a service (SaaS) from single providers will not provide the environment for sustainable innovation and growth for the digital economy in Europe.
CISPE notes that the German Bundeskartellamt decided to review the complaint with its new ex-ante competition powers. This could open a broader investigation on all Microsoft’s software practices not limited to collaboration software. This decision shows that there is a sense of urgency to act to stop anti-competitive practices harming Microsoft’s competitors and the cloud services’ customers. Europe can create similar rules to end those unfair licensing practices without delay by including enterprise software like Microsoft 365 in the scope of the DMA. Europe needs to act now!