Microsoft is set to face a formal complaint from South African competition regulators over allegations of anti-competitive practices related to its Azure cloud computing services. The South African Competition Commission (CompCom) is poised to accuse Microsoft of excessively high fees when businesses seek to switch their cloud licenses to Azure’s competitors.
This pending investigation mirrors ongoing legal challenges against Microsoft across Europe and aligns with increasing international scrutiny surrounding the dominance of major tech companies in the global cloud market.
CompCom’s probe comes on the heels of similar antitrust investigations in the European Union and the United Kingdom, where regulators are examining Microsoft’s licensing practices for potential violations of fair competition. In 2022, the Cloud Infrastructure Services Providers in Europe (CISPE), a 26-member trade body, filed formal grievances with the European Commission, alleging that Microsoft’s licensing terms disproportionately favor its own cloud platform.
The South African case has the potential to result in significant financial consequences for Microsoft. CompCom wields the authority to levy fines of up to 10% of the company’s revenue generated within South Africa.
Microsoft’s Response and Potential Implications
In response to inquiries, Microsoft has indicated that it is currently unaware of a formal complaint filed by the South African authorities. However, the company maintains that it has made global changes to its licensing policies to ensure customers can migrate their licenses to other South African cloud providers without incurring additional costs.
This escalating legal battle highlights a growing global trend – regulators are becoming more assertive in confronting the market power of Big Tech players. The outcome of this South African investigation could have broader implications, potentially setting precedents for regulatory oversight of the cloud computing industry worldwide.
Contextualizing South Africa’s Crackdown
South Africa’s regulators have a recent history of addressing alleged abuses of market dominance by major tech firms. In 2023, Google was directed to enhance the visibility of smaller South African businesses within search results and financially support their training. CompCom is also investigating whether major platforms, such as Microsoft’s Bing, constrain the ability of news and media companies to generate revenue.
