Ofcom said it received evidence showing Microsoft makes it less attractive for customers to run its Office productivity apps on cloud infrastructure other than Microsoft Azure.
Igor Golovniov | Sopa Images | Lightrocket via Getty Images
Microsoft was accused Friday of abusing the dominance of its Azure cloud computing unit to squeeze a — and, in some cases, evaporate — the profit margins of rival cloud platforms in Europe.
The claim came in a complaint from CISPE, a trade body for “infrastructure as a service” cloud firms in Europe. It also comes as the Redmond, Washington-based technology giant is facing intense scrutiny over its cloud computing and software licensing practices in the European Union, as well as the U.K.and U.S.
The allegations stem from tweaks Microsoft made to its licensing terms in 2019. Under those rules, Microsoft required firms to purchase a Software Assurance license and “mobility rights” if they wanted to deploy their Microsoft software on hosted cloud services offered by rival providers.
Customers also couldn’t rely on perpetual licenses they had already purchased to run Microsoft applications on so-called “listed providers” like Alibaba, Amazon, Google, and Microsoft itself. They’d have to buy new licenses, instead. Meanwhile, some software, including Office 365 Windows Apps, was forbidden from running on rival clouds.
The terms are the source of intense anger from competing cloud firms in Europe, like France’s OVHCloud and Italy’s Aruba, as well as Big Tech competitor Amazon. It also formed the basis of an investigation from the European Commission seeking to determine whether Microsoft’s cloud practices are anti-competitive.
Microsoft declined to comment when contacted by CNBC. In 2022, Microsoft President Brad Smith wrote a blogpost saying it was revising its licensing deals and making it easier for cloud providers to compete.
In its complaint Friday, CISPE — which is heavily funded by Amazon — showed an example in its research where one member cloud firm, the name of which was not disclosed, saw revenues from selling Microsoft products including Windows Server, and SQL Server services climb over 300% since 2018, contributing to Microsoft’s own growth.
But the growth of the unnamed cloud vendor’s profit margins didn’t match Microsoft’s, and in fact the competing cloud vendor saw their margins fall from a positive mid-twenties percentage in 2018 to double-digit negative profit margins in 2023.
The biggest decline in profit margins for this cloud firm occurred in 2019, the same year Microsoft changed its licensing terms to favor licensing software on Azure, the CISPE said. From 2019 to 2020, the CISPE member concerned saw their margin collapse from over 20% to zero.
CISPE also said that members shared evidence that the price they were charged for Microsoft’s SQL Server was much higher than the price quoted by Microsoft for customers using Azure.
For example, a company licensing Microsoft’s software for hosting and delivering their applications would have to pay 612.27 euros ($670) per 2-core SQL Server Enterprise product, 92.01 euros more than what Microsoft charges customers using Azure on average (520.26 euros), according to the CISPE’s data.
The complaint and the findings add to previous research from Frederic Jenny, a professor of economics at ESSEC Business School in Paris who specializes in competition law, for CISPE. Jenny found that Microsoft effectively charges businesses a 28% “tax” to run its software products on competing cloud services.
The European Commission told CNBC: “The Commission has received several complaints regarding Microsoft, including in relation to its product Azure, which we are assessing based on our standard procedures. We have no further comment to make at this stage.”
The U.K.’s Competition and Markets Authority, which took charge from media and telecommunications regulator Ofcom for a probe into competition in the U.K. cloud computing market last year, was not immediately available for comment when contacted by CNBC.
U.S. President Donald Trump gestures as he poses next to a sign before a family photo at a world leaders’ summit on ending the Gaza war, amid a U.S.-brokered prisoner-hostage swap and ceasefire deal between Israel and Hamas, in Sharm el-Sheikh, Egypt, Oct. 13, 2025.
Suzanne Plunkett | Reuters
This might not be Christmas, but the war in the Middle East is over — at least according to U.S. President Donald Trump.
On Monday, Trump declared at the Knesset, Israel’s parliament, that the “long and painful nightmare” was finally over for both the Israelis and Palestinians. More straightforwardly, Trump gave an unequivocal “yes” when asked by reporters if the war in the Middle East has ended, Reuters reported.
Broadcom, meanwhile, surged almost 10% after it jointly announced a partnership with — who else? — OpenAI to build and deploy custom chips. But where this puts Nvidia, OpenAI’s other near and dear one, and on whose chips the ChatGPT maker relies, remains a question.
Though Christmas has yet to arrive, OpenAI is starting to look like the tech sector’s Santa Claus, who has his sack full of presents — and, more importantly, cash, according to Oracle.
— CNBC’s Holly Ellyatt contributed to this report.
What you need to know today
And finally…
U.S. President Donald Trump shakes hands with Argentina’s President Javier Milei during the 80th United Nations General Assembly, in New York City, New York, U.S., Sept. 23, 2025.
In a move that Treasury Secretary Scott Bessent announced Thursday on social media site X, the U.S. is providing a $20 billion currency swap line with Argentina’s central bank — essentially exchanging stable U.S. dollars with volatile pesos.
The move comes amid liquidity concerns in Argentina that threatened stability for the country as it faces key midterm elections. There are equal parts economic and political stakes with the venture, which marks the first U.S. intervention of this nature since rescuing Mexico in 1995.
Google will invest $15 billion to build data center capacity for a new artificial intelligence hub in southern India, Google Cloud CEO Thomas Kurian announced at an event Tuesday.
The investment will roll out over the next five years, and will be Google’s largest AI hub in the world outside of the U.S, Kurian added.
Earlier on Monday, the Minister for Human Resources Development of the Indian state of Andhra Pradesh, Nara Lokesh, put the 1-gigawatt project at $10 billion.
The deal comes after “a year of intense discussions and relentless effort,” and “is just the beginning,” Lokesh said in a post on the social media platform X.
The Indian outlet Economic Times previously reported that the investment would be made by Google’s Indian subsidiary Raiden Infotech, which plans to develop three campuses across the city of Visakhapatnam.
According to another report from ET on Tuesday, state officials planned to continue doubling down on such projects and to significantly scale up the state’s computing capacity over the next three years.
Companies are amping up investments in infrastructure to keep pace with surging global demand for cloud services as AI services become increasingly popular.
As part of its second-quarter earnings in July, Google increased its forecast for capital expenditures in 2025 to $85 billion, up from $75 billion in February, due to “strong and growing demand for our Cloud products and services.”
That same month, the company also announced plans to invest $25 billion in data center and artificial intelligence infrastructure over the next two years in states across the biggest electric grid in the U.S.
India is increasingly attracting multinational players, such as Microsoft and AWS, to invest in the country’s cloud and AI infrastructure.
U.S. President Donald Trump speaks while World leaders listen during a summit of European and Middle Eastern leaders on Gaza on October 13, 2025 in Sharm El-Sheikh, Egypt.
Chip Somodevilla | Getty Images
This might not be Christmas, but the war in the Middle East is over — at least according to U.S. President Donald Trump.
On Monday, Trump declared at the Knesset, Israel’s parliament, that the “long and painful nightmare” was finally over for both the Israelis and Palestinians. More straightforwardly, Trump gave an unequivocal “yes” when asked by reporters if the war in the Middle East has ended, Reuters reported.
Broadcom, meanwhile, surged almost 10% after it jointly announced a partnership with — who else? — OpenAI to build and deploy custom chips. But where this puts Nvidia, OpenAI’s other near and dear one, and on whose chips the ChatGPT maker relies, remains a question.
Though Christmas has yet to arrive, OpenAI is starting to look like the tech sector’s Santa Claus.
— CNBC’s Holly Ellyatt contributed to this report.
What you need to know today
War in the Middle East is over, Trump says. At Israel’s parliament, Trump gave a speech in which he said that the “long and painful nightmare” for both the Israelis and Palestinians was over. He also urged, at a separate event, for leaders to put “old feuds” behind.
Broadcom joins the OpenAI party. The two companies announced Monday that they’re planning to develop and deploy OpenAI-designed chips, amounting to 10 gigawatts, starting late next year. Shares of Broadcom popped almost 10% on the news.
JPMorgan says it will invest $10 billion in critical industries. The four areas of focus — which the bank considers crucial to U.S. security — are: defense and aerospace, “frontier” technologies such as AI, energy technology and supply chain and advanced manufacturing.
[PRO] European sectors less affected by trade war. The continent isn’t in the crosshairs of Trump’s latest tariffs, but a weakening U.S. dollar could affect Europe’s exports. UBS picks three sectors more shielded from that — leaving out a notable one.
And finally…
U.S. President Donald Trump shakes hands with Argentina’s President Javier Milei during the 80th United Nations General Assembly, in New York City, New York, U.S., Sept. 23, 2025.
In a move that Treasury Secretary Scott Bessent announced Thursday on social media site X, the U.S. is providing a $20 billion currency swap line with Argentina’s central bank — essentially exchanging stable U.S. dollars with volatile pesos.
The move comes amid liquidity concerns in Argentina that threatened stability for the country as it faces key midterm elections. There are equal parts economic and political stakes with the venture, which marks the first U.S. intervention of this nature since rescuing Mexico in 1995.
