By Foo Yun Chee
BRUSSELS (Reuters) -Microsoft is in talks with CISPE in an attempt to resolve its European Union antitrust complaint about the U.S. software giant's cloud computing licensing practices, the trade group said on Wednesday.
Working the issue out bilaterally could help Microsoft (NASDAQ:MSFT) stave off a possible lengthy EU investigation that could lead to a possible fine and an order to change its business practices.
CISPE, whose members include Amazon (NASDAQ:AMZN) and 26 small EU cloud providers, filed a complaint with the European Commission in late 2022 alleging that Microsoft's new contractual terms imposed on Oct. 1 were harming Europe's cloud computing ecosystem.
Microsoft, which ranks behind market leader Amazon in the cloud computing sector but ahead of Alphabet (NASDAQ:GOOGL)'s Google, amended its licensing terms in mid-2022 after rivals in Germany, Italy, Denmark and France took their grievances to the EU competition watchdog.
However, Amazon, Google, Alibaba (NYSE:BABA) and Microsoft's own cloud services are excluded from the changes.
"Today, CISPE confirms that it has opened discussions with Microsoft aimed at resolving ongoing issues related to unfair software licensing for cloud infrastructure providers and their customers in Europe," the trade body said in a statement.
"Both parties are exploring potential remedies."
"We continue to work constructively with CISPE to resolve concerns raised by European cloud providers," a Microsoft spokesperson said, declining to provide details.
The Commission said it had received several complaints about Microsoft, including in relation to its product Azure, which it was assessing based on its standard procedures, but declined to comment further. Azure is Microsoft's cloud computing platform.
CISPE said the discussions were at an early stage and it was uncertain whether these would result in effective remedies but said "substantive progress must be achieved in the first quarter of 2024".
"We are supportive of a fast and effective resolution to these harms but reiterate that it is Microsoft which must end its unfair software licensing practices to deliver this outcome," said CISPE secretary general Francisco Mingorance.
Microsoft, which notched up 1.6 billion euros ($1.7 billion) in EU antitrust fines in the previous decade, has in recent years changed its approach towards regulators to a more accommodative one.
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