Microsoft Faces Scrutiny Over Cloud Practices As Spanish Startup Association Files Complaint: 'All Companies Should Be Able To Compete...'

In the latest development, Microsoft Corporation MSFT is under scrutiny from a Spanish startup group, which has filed a complaint against the tech giant’s cloud practices. This marks another challenge for Microsoft’s rapidly expanding cloud computing services.

What Happened: The Spanish Startup Association, representing over 700 startups in Spain, has complained to the Spanish antitrust regulator against Microsoft, Reuters reported on Tuesday. The association alleges that Microsoft is using its dominant position in operating systems and traditional productivity software markets to force the adoption of its Azure cloud. The group also claims that Microsoft has set up artificial barriers that restrict startups’ ability to compete on a level playing field.

The complaint outlines practices such as barriers to data portability and restrictive contractual conditions in software licenses, which limit the choice and flexibility that startups require for resilience, innovation, and growth.

The association has called on the Spanish competition watchdog to launch an investigation and take immediate measures to ensure a competitive market.

“We believe that all companies should be able to compete in an environment of equality so as not to be left behind either as customers or as companies providing this technology,” said Carlos Mateo, president of the Spanish Startup Association.

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In November last year, Cloud Infrastructure Services Providers in Europe (CISPE), which includes Amazon.com lodged a complaint with EU antitrust regulators about Microsoft’s new contract terms and other practices, alleging harm to the European cloud computing ecosystem.

The European Commission and the U.K. Competition and Markets Authority are currently investigating the sector, with Microsoft’s request for customer data being a part of the probe.

Why It Matters: This complaint comes in the wake of the EU Digital Markets Act which is now enforceable and aims to break anti-competitive practices of Big Tech. The Act brings significant changes to U.S. tech giants, including Microsoft, by regulating their behavior.

Moreover, in April, the European Union's merger watchdogs cleared Microsoft’s $13 billion investment in OpenAI Inc. from a formal investigation. This decision followed scrutiny sparked by revelations of Microsoft's close relationship with the ChatGPT developer, leading to a review under the EU's merger regulation.

Price Action: Microsoft stock closed at $413.54 on Monday while it was trading 0.3% lower at $412.05 in the pre-market on Tuesday, as per Benzinga Pro.

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