Legislation professor urges CMA to take swift and pressing motion over Microsoft cloud licensing
Microsoft’s “dangerous” cloud licensing practices should be swiftly and straight remediated by the Competitors and Markets Authority (CMA) to stop irreparable hurt being executed to the UK cloud providers market, a college legislation professor has warned.
In a 36-page tutorial paper, Peter Whelan, a legislation professor on the College of Leeds, warns the UK competitors watchdog that it dangers lacking a chance to shortly draw a near Microsoft’s controversial cloud licensing practices if its provisional suggestions about tackle the matter are pursued.
These suggestions, initially revealed in January 2025, mentioned the CMA is contemplating taking a “focused method” to addressing the anti-competitive points dropped at gentle by its investigation relating to Amazon Internet Companies (AWS) and Microsoft’s behaviour within the UK cloud market.
Singling out the previous, Microsoft has come underneath hearth by the CMA for its choice to cost clients extra for working its software program in cloud environments hosted by its opponents.
In its January 2025 report, the CMA mentioned this follow “exacerbates the hurt we have now provisionally discovered arising from excessive market focus and limitations to entry and enlargement in relation to Microsoft’s vital unilateral market energy.”
To treatment the scenario, the report urged the CMA board ought to use powers conferred on it by means of the roll-out of the Digital Markets, Competitors and Customers Act 2024 (DMCCA) on 1 January 2025 to mark Microsoft out as a provider with strategic market standing (SMS).
This may imply the CMA may impose legally binding conduct necessities or pro-competition interventions on each corporations to restrict and treatment the toll their actions have allegedly had available on the market.
Lengthy wait
Nevertheless, Whelan’s paper suggests it may take as much as 9 months or extra to confer SMS on Microsoft, and no less than 18 months for any treatment imposed underneath DMCCA to take impact.
“Given the complexities concerned in these novel authorized processes, in addition to the potential for drawn out implementation or trialing phases, it is extremely doable certainly that any treatment imposed underneath the DMCCA regime will solely begin to take impact greater than a yr and a half after the publication of the CMA’s closing choice in its market investigation,” he wrote.
“The timescale could be even longer if, resulting from capability constraints, for instance, the CMA board didn’t provoke an SMS designation in opposition to Microsoft instantly following the publication of the Last choice report within the cloud providers market investigation.”
Because of this, Whelen goes on to advise the CMA to think about taking swifter and extra direct motion in opposition to Microsoft and its licensing strategies.
“It’s axiomatic {that a} swift enforcement response to conduct that’s harming competitors could be important for the effectiveness of a contest treatment, and notably so with respect to digital markets.”
Citing an article from the European competitors journal, entitled Strengthening efficient antitrust enforcement in digital platform markets (2022), Whelan added: “In such fast-moving markets, ‘well timed intervention is of the essence in stopping irreparable hurt to competitors’.”
The paper’s publication comes a couple of month earlier than the CMA is anticipated to publish the ultimate choice in its investigation into how nicely competitors works within the UK cloud infrastructure providers market, which started in October 2023.
The investigation itself was prompted by the end result of a 12-month investigation by communications regulator Ofcom to evaluate how aggressive the UK cloud market is – and set up who its main gamers are.
Partway by means of that investigation, which started in September 2022, Ofcom singled out the behaviour of AWS and Microsoft as being notably problematic from a contest standpoint. And this, in flip, resulted in Ofcom referring the market over to the CMA for additional investigation.
The CMA is way from the one regulator or get together to have taken situation with Microsoft’s cloud licensing practices, as its cloud rival, Google, filed a grievance with the European Fee over its actions on this matter in September 2024.
Laptop Weekly additionally reported final month that its behavior of charging clients extra for working its software program in opponents’ cloud is the topic of a £2bn authorized declare that has been filed with the UK Competitors Enchantment Tribunal.
Ryan Triplette, govt director of the Coalition for Truthful Software program Licensing, mentioned his organisation helps the contents of Whelan’s paper, having additionally been one other of the events to have beforehand spoken out about Microsoft’s cloud licensing preparations.
“The UK Competitors and Markets Authority has made it clear that Microsoft makes use of its ‘vital market place’ in software program services and products to limit cloud selection, the impression of which is in the end borne by the patron – in increased prices, safety vulnerabilities and taxpayer waste,” he mentioned. “We urge the CMA forward of its closing choice to guard clients by taking sturdy, direct motion in opposition to Microsoft to finish its dangerous software program licensing practices.”
