Waste of money

To what extent do unfair licensing conditions of established software companies cause additional costs in the digital transformation? This is the question posed by a Europe-wide study, the results of which were presented by Cispe. The study, conducted by an international expert in competition law, Professor Frédéric Jenny, reveals alarming trends. His earlier study highlighted the strategies used by a small number of dominant software vendors to deliberately entice customers to move their enterprise software to in-house cloud infrastructure services. Foremost among these is Microsoft, whose unfair business practices underpin its position as a cloud provider. The new study provides further evidence of the damage caused by these practices, estimating the cost of unfair licensing of a single vendor's product at over one billion euros - in the private sector only. The cost to the public sector and taxpayers has yet to be calculated. Microsoft's unfair licensing terms for its SQL Server make it significantly more expensive to use in third-party cloud infrastructures than in Microsoft's own Azure cloud infrastructure.

   Microsoft's business practices exploit its dominant position in productivity software, raising barriers and limiting choice for German customers looking to move to the cloud. These artificially high prices also make it almost impossible to pursue a multi-cloud approach. The investigation shows Microsoft's significant market power and underscores the group's importance under Section 19a of the German Competition Act. According to Euritas President, this may be a waste of taxpayers' money.

"This would mean spending far more tax dollars than necessary to provide services to governments and citizens."

Ralf Resch, President, Euritas

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