Amazon is the latest company to open up about Microsoft"s unfair cloud computing practices and has told the UK"s Competition and Markets Authority (CMA) that Microsoft"s practices prevent customers from switching to rivals. This comes just a week after Google wrote a letter to the UK regulators asking them to look into Microsoft"s practices. In the letter, Google had accused Microsoft of using business tactics that left competitors at a significant disadvantage.
Now, the CMA has published a letter from Amazon (via Reuters) which talks about Microsoft"s practices and how the company"s terms of service prevent users from making a switch to another service.
Some IT providers, such as Microsoft, use licensing practices that restrict customer choice and make switching more difficult. For example, Microsoft changed its licensing terms in 2019 and again in 2022 to make it more difficult for customers to run some of its popular software offerings on Google Cloud, AWS, and Alibaba. To use many of Microsoft’s software products with these other cloud services providers, a customer must purchase a separate license even if they already own the software. This often makes it financially unviable for a customer to choose a provider other than Microsoft.
Amazon further referenced a study that was published by Professor Jenny earlier this year. In the paper, Professor Jenny talked about the cost of unfair software licensing practices. He noted that "in selecting Microsoft’s flagship productivity software Office 365, customers are forced into paying an additional licensing fee if they choose a third-party cloud infrastructure provider instead of Microsoft’s in-house offering, Azure." This in turn increases the cost of choosing a rival and "can limit customers’ freedom in mixing cloud solutions based on price and qualitative considerations."
Amazon closed the letter by noting that it supports Principles for Fair Software Licensing and "looks forward to engaging cooperatively with the CMA during its investigation." The CMA is currently investigating both Amazon and Microsoft for unfair business practices, after Ofcom published a report noting that both Amazon and Microsoft are using their market position to prevent consumers from switching to rivals.