Spanish startups accuse Microsoft of trying to force them out of the cloud business

On Tuesday, the Association of Spanish Startups filed a complaint against Microsoft with the National Markets and Competition Commission (CNMC). The organization, which owns about 700 Spanish startups, blames the American multinational for its “restrictive practices observed in the cloud services market” that “establish artificial barriers that limit the ability of startups to compete fairly and competitively.”

Among these practices, the Association points to the difficulties Microsoft allegedly creates by preventing data from being ported to services it does not control, or “contractual terms that restrict competition in software licenses that would impede or impede the free choice of software providers.” These services reduce the choice and flexibility startups need to be sustainable, innovate and grow,” Spanish startups protest.

Last November, the CNMC launched an investigation into the state of competition in the cloud services sector in Spain. The regulator said it is a “critical sector for digital transformation” and is already used by more than 30% of all companies. However, the market is very concentrated. According to Statista, in the first quarter of this year, AWS (Amazon’s cloud services division) accounted for 31% of global business, Microsoft’s Azure 25%, and Google 11%.

Apart from the Chinese giants Alibaba or Tencent, which occupy 6% of the market mainly in the countries around Beijing, the remaining players (transnational corporations such as Salesforce, IBM or Oracle, also American) do not exceed 3%.

The CNMC’s aim was to prepare a “series of recommendations” for the “effective functioning” of the sector after checking “the tendency towards concentration in a few operators and the difficulty of changing suppliers”. Now the Spanish Startup Association is calling on you to go further and launch “an exhaustive investigation to determine whether there are violations of current competition rules.”

“Furthermore, urgent action is required to ensure a more open and competitive market in which start-ups can thrive without being hampered by monopolistic or anti-competitive practices,” the Spanish emerging companies add.

elDiario.es has contacted Microsoft to include its position in this information, but has not yet received a response. In recent years, the US giant has announced major investments in Spain to build data centers that will house both its cloud services business and new artificial intelligence requirements. The latest of these, announced in February after a meeting between its president and Pedro Sánchez, involves the allocation of 1.950 million euros until 2025.

This is not the first complaint of this type that Microsoft has received in Europe. Also in November, Cloud Infrastructure Service Providers Europe (CISPE) took the Bill Gates-founded company to the EU antitrust regulator over its cloud practices. In particular, the organization (whose partners include Amazon) complained about new contractual terms introduced by Microsoft in its online office services.