Yesterday, the UK’s Competition and Markets Authority announced the scope of its cloud market investigation formally stated that:

“the software licensing practices by some cloud services providers [] may reduce competition or raise barriers to entry.”

It goes on to name Microsoft in particular as one firm whose software licensing practices;

“may make it less attractive for customers to use licensed software products on the cloud infrastructure of rival providers.”

CISPE welcomes the decision by the UK CMA to investigate cloud licensing practices in the cloud by legacy software providers and we stand ready to support this for the benefit of all UK cloud customers.  This is a highly significant development. Many regulators around the world have noted the potential for unfair software licensing to distort competition, but the CMA is the first to act with a formal investigation.

CISPE and its members have consistently argued that discriminatory pricing, as well as favouring the use of essential productivity software with specific clouds limits choice and increases costs for customers. Research from leading competition economist Professor Jenny, as well as detailed evidence provided to Ofcom in its market study, clearly shows how dominant software providers surcharge customers to use clouds from other vendors.

This same evidence has been provided to the European commission as part of CISPE’s anti-trust complaint against Microsoft. We will be cooperating with the CMA and other regulators, to act to protect the interests of cloud customers in their jurisdictions from these ongoing anti-competitive practices.