[ad_1]
Press play to hearken to this text
Over the previous decade, Microsoft has pulled off a exceptional transformation of its public picture in Europe — from unhealthy boy to probably the most Brussels-friendly of tech giants?
However that shine might now be coming off. In Brussels and throughout Europe, the Seattle-based large faces a flurry of antitrust complaints about its cloud enterprise in addition to recent claims that the corporate shouldn’t be dwelling as much as its phrase on paying press publishers for his or her content material.
A brand new onslaught is choosing away at Microsoft’s picture in Europe because the “pleasant one” amongst Huge Tech firms — a place that was painstakingly cultivated below the management of Microsoft’s veteran lawyer-president, Brad Smith, in the course of the previous seven years.
“Some firms have pretended for years to have cloaks of invisibility, however the spell has worn off. Abuse of market dominance is unfair and now that the abuse is slowly changing into seen, we as legislators will make sure that the cloaks now not will work,” stated Paul Tang, a left-wing Dutch member of the European Parliament.
Microsoft has tactfully managed to keep away from the heavy antitrust fines of yesteryear — the final vital one being a €561 million slap on the wrist in 2013 for failing to observe earlier competitors orders, closing a 10-year interval wherein it had racked up €2.24 billion in EU antitrust penalties.
However practices are actually rising that hark again to the time when the corporate discovered itself within the EU’s crosshairs, calling into query its straight-laced picture.
“Microsoft additionally engages in lots of the similar practices within the few areas the place it has an entrenched place — specifically, the way it makes use of Home windows’ dominant place in PC working programs to leverage into different markets,” stated Zach Meyers, a senior analysis fellow on the Centre for European Reform.
He was referring to the bundling of Microsoft’s merchandise and the promotion of its personal companies inside its personal programs — considerations that prompted workplace messenger service Slack to file a criticism to the European Fee in 2020, over considerations that the corporate had been illegally tying its Groups software program, which competes with Slack’s personal, with its “market-dominant Workplace productiveness suite.” The Fee continues to be evaluating the criticism.
Antitrust woes
Amongst pro-regulation pushes, Microsoft supported the EU’s just lately adopted Digital Markets Act, pitching a sequence of “ideas” for its personal app retailer meant to curry favor with EU regulators engaged on the brand new guidelines. Smith himself contracted conferences with the bloc’s digital czar Margrethe Vestager, wherein he highlighted his firm’s dedication to the EU crackdown on Huge Tech giants.
However these stances are actually being referred to as into query amid a flurry of complaints, focusing on certainly one of Microsoft’s largest and less-known companies: cloud computing. In Q2 this 12 months, the corporate’s business cloud revenues reached $22.1 billion.
The European Fee has began to ask cloud computing firms about Microsoft’s practices of their market following complaints filed final 12 months by the likes of French cloud outfit OVH Cloud and German participant NextCloud. The previous had accused Microsoft of abusive licensing phrases whereas the latter was involved concerning the bundling of the corporate’s OneDrive services with the Home windows working system.
EU antitrust regulators circulated a questionnaire to Microsoft Azure companions and rival outfits in March, soliciting data on probably abusive actions undertaken by the U.S. tech outfit concerning the licensing of its merchandise.
For its half, CISPE, a cloud companies affiliation representing among the gamers concerned within the Microsoft complaints, stated that smaller corporations that depend on Microsoft’s cloud have been afraid to talk out.
“Concern of retaliation and dependency on its productiveness software program created a tradition of omertà that prevented individuals from talking out,” stated Francisco Mingorance, secretary-general of CISPE.
Regardless of the Fee’s early-stage questioning of these concerned within the sector, Vestager instructed Reuters just lately that no apparent competitors considerations had but emerged within the area. Europe’s cloud ecosystem replied with a strongly worded open letter.
Requested concerning the cloud complaints, Microsoft stated that European corporations have managed to construct up their companies off the again of the corporate’s efforts.
“The cloud market is rising and European cloud suppliers have constructed profitable enterprise fashions utilizing Microsoft software program and companies,” a spokesperson stated.
Falling via the cracks
Till just lately, Microsoft had managed to craft a best-in-class picture with policymakers.
“Microsoft has provided a extra accommodating stance in direction of pro-competitive tech regulation than the opposite Huge Tech firms — each in Brussels and elsewhere,” stated Meyers, from the Centre for European Reform, in reference to the Digital Markets Act.
And certainly, Brad Smith was usually fast to throw fellow tech giants, together with Google and Apple, below the bus for his or her enterprise practices — particularly in sectors the place Microsoft itself is weaker akin to app shops and search. In June final 12 months, Microsoft and Google ended their five-year cease-fire, resulting in an escalating confrontation between the 2 long-term rivals.
In each Brussels and Washington, Microsoft has largely escaped probably the most heated discussions on privateness and on content material moderation — together with on copyright infringement and the battle in opposition to terrorist propaganda on-line — as policymakers targeted their wrath and legislative vitality on platforms akin to Google, Fb and Twitter.
And as EU establishments craft new guidelines for the way tech firms might want to take care of unlawful content material below the Digital Companies Act, Microsoft’s networking platform LinkedIn shouldn’t be below the highlight.
In some areas akin to cybersecurity and synthetic intelligence, the tech large is taken into account by authorities officers as a dependable companion. Microsoft was the one firm invited amongst politicians, regulators and lecturers to discuss AI and human rights from the enterprise perspective this week on the Council of Europe’s inaugural assembly on a future treaty on AI, in accordance with a program seen by POLITICO.
Capital pains
Microsoft has additionally performed the function of investor and job creator in some European capitals. In 2020, Brad Smith introduced plans to make Greece a regional hub for cloud. In 2021, Microsoft stated it might put money into Belgium.
And the tech large nonetheless has good relations with Berlin and Paris, the place a high French official described the corporate as “a instructor’s pet.”
Nonetheless, within the context of the French presidential marketing campaign, the cloud large grew to become an emblem of kinds for Europe’s reliance on international firms for digital infrastructure. When discussing tech points, rivals to Emmanuel Macron have repeatedly name-checked the U.S. tech large — in a bid to assault the federal government’s controversial resolution to let the corporate host the Well being Knowledge Hub, a state challenge to bolster medical analysis.
On Wednesday, Philippe Latombe, an MP allied to Macron who’s been very vocal on sovereignty and cloud computing, wrote in an op-ed that the French ecosystem ought to be part of forces in opposition to Huge Tech, together with Microsoft, successfully placing the corporate in the identical bag as Google, Fb, Amazon and Apple — a membership that the software program large has lengthy tried to not be related to.
In January, France’s competitors authority launched a cloud-computing sector inquiry. Scores of privateness regulators throughout Europe additionally began investigating using cloud companies by the general public sector.
In the meantime in Berlin, the stone in Microsoft’s shoe comes from an trade pricey to the politicians’ coronary heart: Press publishers.
Final week, German gathering group Corint Media, which represents greater than 300 information organizations together with RTL, Die Welt and POLITICO proprietor Axel Springer, determined to take Microsoft to Germany’s Patent and Trademark Workplace’s arbitration board over copyright remuneration, after practically two years of negotiations that the rights holders deemed unsuccessful.
The tech large stated it had “a historical past of supporting journalism and sharing income with publishers.” However Microsoft is paying for the excessive expectations created by a political alliance with the press trade, initially designed to take a shot at Google.
“Microsoft and Brad Smith stated it was vital for the well-being of the press that it’s properly remunerated and pretty paid for content material however they by no means made us an appropriate provide,” stated Oliver Schmidt, head of content material technique at Corint Media.
This text is a part of POLITICO Professional
The one-stop-shop answer for coverage professionals fusing the depth of POLITICO journalism with the ability of know-how
Unique, breaking scoops and insights
Personalized coverage intelligence platform
A high-level public affairs community
[ad_2]
Source link