€470M package: How Google tried to upend Microsoft's antitrust settlement
Google, a subsidiary of Alphabet Inc., recently proposed a package worth approximately €470 million ($512 million) to the Cloud Infrastructure Services Providers in Europe (CISPE). The offer was an unsuccessful attempt to disrupt CISPE's antitrust settlement with Microsoft. This settlement had saved Microsoft from a potentially costly European Union case, following CISPE's complaint about Microsoft's software licensing processes.
CISPE's complaint and settlement with Microsoft
CISPE had lodged a complaint with the European Union's antitrust division, arguing that Microsoft's software licensing processes made it difficult for customers to switch cloud providers. The complaint centered on Microsoft tying its business software to its Azure cloud services. However, CISPE withdrew their complaint last week after negotiating a deal for fairer access to Microsoft's technologies.
Google's counteroffer to maintain CISPE's EU complaint
Days before the agreement between CISPE and Microsoft was announced, Google made a counteroffer aimed at persuading CISPE to maintain their EU complaint. According to Bloomberg, Google's package consisted of approximately €455 million worth of software licenses for Google's cloud technology over five years and €14 million in cash. The offer was contingent on CISPE maintaining its EU antitrust complaint against Microsoft.
Amazon Web Services supplements Google's offer
Google's package was supplemented by about €6 million in financial contributions from Amazon Web Services (AWS), as part of its ongoing partnership with CISPE. AWS stated that is a "founding member of CISPE and has regularly made voluntary contributions to CISPE." CISPE members accepted an offer that permits them to use enhanced Microsoft Azure features and offer Microsoft applications on their local cloud infrastructures. Bloomberg reported that Microsoft's offer also includes a €10 million financial contribution.
Google's stance on fair software licensing
A Google spokesperson stated that the firm has long supported the principles of fair software licensing and was considering joining CISPE to combat anticompetitive licensing practices. CISPE refused to confirm any terms of the deal but stated that its members were presented with alternative options to accepting the Microsoft deal. Despite lagging behind Amazon and Microsoft in the cloud market, Google recently posted a first-quarter profit of $900 million from its cloud operation, surpassing analysts' projections of $672.4 million.
