Google tried to scupper Microsoft’s CISPE settlement with a $512 million sweetener – but it failed

Google offered European cloud firms a $512 million package to stop CISPE from settling its antitrust case against Microsoft, just days before the deal was announced.

According to documents seen by Bloomberg, the package included around $15 million in cash, as well as roughly $495 million worth of software licenses for Google’s cloud products over the next five years.

The deal was intended to lock the group into continuing their legal challenge against Microsoft, but appears the members opted against Google’s lucrative offer in favor of a series of concessions made by Microsoft.

The Cloud Infrastructure Services Providers in Europe (CISPE), a non-profit trade association for cloud providers, had originally lodged a complaint with the EU’s antitrust branch accusing Microsoft of anticompetitive software licensing practices.

The case alleged that Microsoft had acted illegally by making it harder for customers to change their cloud providers by tying its business software to its Azure cloud services platform.

Google was not alone in its attempts to try and derail the settlement. AWS is reported to have made around $6.5 million in financial contributions to the proposal.

When asked about its attempt to stymie Microsoft’s settlement, a spokesperson for Google Cloud gave ITPro the following statement:

“Google Cloud has long supported the principles of fair software licensing. We had discussions about joining as a member to help CISPE continue to fight against anti-competitive licensing and promote choice, innovation, and the growth of the digital economy in Europe.”

A spokesperson for CISPE confirmed to ITPro that its members were “presented with alternative options to accepting the Microsoft deal”, but could not reveal any of the terms in the proposal.

“However, the members voted by a significant majority to accept the Microsoft offer which, in their view, presented the best opportunity for the European cloud sector.”

CISPE claims “significant victory” for European cloud providers

Initially filed in November 2022, the CISPE complaint argued that Microsoft’s “ongoing position and behaviors are irreparably damaging the European cloud ecosystem and depriving European customers of choice in their cloud deployments”.

Microsoft agreed to enter discussions with the trade group in February 2024, hoping to avoid a costly court battle. On 11 July, CISPE announced it had accepted a $22 million settlement with Microsoft and would be dropping its complaint. 

Under the deal, CISPE members will be able to use enhanced Microsoft Azure features and service providers have permission to provide Microsoft applications and services on their local cloud platforms.

In a statement announcing the decision, Francisco Mingorance, secretary general of CISPE said the deal marked a “significant victory” for stakeholders in the European cloud market.

“This is a significant victory for European cloud providers. CISPE has given Microsoft the benefit of the doubt and believes that this agreement will provide a level playing field for European cloud infrastructure service providers and their customers.”