The Spanish Startup Association has today filed a complaint against Microsoft before the National Markets and Competition Commission (CNMC) for alleged “restrictive practices observed in the cloud services market,” as reported. the organization in a statement.
The 700 companies that are part of the organization affirm in their complaint that the technology company would be “taking advantage of its dominant position in the operating systems (Windows) and office automation (Office) markets to force the use of its Azure cloud,” in which which could constitute possible “anti-competitive behaviors by Microsoft” that “are significantly affecting both cloud providers and customers within the Spanish startup ecosystem.”
Microsoft has responded to the complaint with a brief statement, reported by Reuters, in which it states that it “provides its customers with choice and flexibility when switching to other cloud providers, at no cost. Additionally, our license terms allow our customers and third parties to operate and offer our software on all clouds. “We are committed to collaborating with the Spanish Startup Association to learn more about their concerns.”
Continuing with the complaint, the association also claimed that the company would be “imposing artificial barriers” that, in its opinion, limit the ability of startups to compete fairly and competitively. For example, restrictive contractual terms on software licenses or limitations on data portability from one system to another system other than the home system.
“These practices would include barriers to data portability or contractual conditions that restrict competition in software licenses, which would make it difficult or prevent the free choice of providers of these services, reducing the capacity for choice and flexibility that startups need to being able to be resilient, innovate and grow,” the statement added.
Beyond trying to correct this situation, the association has assured that its objective with this complaint is to urge the CNMC to carry out an exhaustive investigation to determine the existence of violations of current competition regulations.
In addition, it requests that urgent measures be taken to ensure a “more open and competitive” market so that startups can “thrive without being hindered by monopolistic or anti-competitive practices.”
Along these lines, the Spanish Startup Association has also called on other affected companies and organizations to share their experience and collaborate in promoting a competitive environment that benefits "all participants in the 'cloud' market."
“In an increasingly digitalized world, cloud computing is one of the most important technologies when it comes to driving the digital, sustainable and intelligent transformation of different sectors and we believe that all companies should be able to compete in an environment of equality so as not to be left behind either as end users or as companies that provide this technology,” stressed the president of the Spanish Startup Association, Carlos Mateo.
In the organization's opinion, this case may mark “a turning point in the regulation of the digital market in Spain” due to its possible long-term implications for competition policy and technological innovation throughout Europe.
Precisely, this Tuesday the CNMC has launched a public consultation to analyze competition in cloud services in Spain, which will remain open until June 21.
“These services, which are already used by more than 30% of companies in Spain, allow data to be processed, stored and managed remotely and play an essential role in the success of the digital transformation,” highlighted the CNMC.
This public consultation is part of a study initiated in November of last year to examine the elements that may condition the efficient and competitive operation in this sector.
Once the study is concluded, the CNMC will formulate a series of recommendations to “promote an efficient and competitive environment that encourages good prices, quality and innovation.”
In an analysis prior to the study, the CNMC identified several challenges from the point of view of competition, such as the tendency towards concentration in a few operators and the difficulty of changing suppliers.
The CNMC considers that cloud services are a “basic pillar of the digital transformation process and business competitiveness” and believes that they should be provided in an environment that encourages competition in prices, quality and innovation.
