South African regulators target Microsoft Azure in antitrust complaint

South African antitrust authorities are poised to lodge a formal complaint against Microsoft Corp.’s Azure cloud division, citing concerns of monopolistic practices. Allegations suggest exorbitant fees hindering businesses from switching cloud providers. This move could incite a legal clash, potentially culminating in fines up to 10% of Microsoft’s revenue in South Africa. Globally, regulators scrutinize Azure, with ongoing investigations in the EU and the UK. Microsoft contends its licensing policies are fair, as South African watchdogs intensify their scrutiny of Big Tech.

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By Loni Prinsloo and Samuel Stolton

Microsoft Corp.’s Azure cloud business is set to be hit by a formal complaint from South African antitrust watchdogs amid growing concerns from regulators across the world that the US tech giant is abusing its market power to squeeze out rivals.

The South African Competition Commission will accuse Microsoft of charging too much for businesses to switch their cloud licenses to other vendors, according to people familiar with the filing, who spoke on condition of anonymity.

The move, likely in the coming days, could set the stage for a legal battle that may end up with a fine of up to 10% of the firm’s revenue in the African nation.  

Microsoft’s Azure cloud business has also been targeted by other global regulators — including the European Union, where it is currently subject to an informal investigation from watchdogs. 

The UK’s competition regulator has also started a probe into the cloud market, where it is examining in part how Microsoft’s Azure terms may be limiting competition.  

Microsoft said the company was not aware of a complaint by the South African competition authority, but was standing ready to answer any questions about their software licensing policies. 

“Microsoft implemented software licensing changes two years ago which apply globally and enable South African customers to bring their Microsoft software licenses to any South African cloud provider at no additional cost,” said a Microsoft spokesperson. 

The South African regulator declined to immediately comment.

Like regulators across the world, the South African watchdog has been cracking down on Big Tech in recent years and firms’ alleged abuses of market power.

Last year, Google was ordered to improve visibility for smaller South African companies in search results, and to pay out for the training of smaller platforms. 

Officials are currently probing whether artificial intelligence models, digital and social media platforms managed by services including Microsoft’s Bing are limiting the nation’s news and media companies’ ability to generate revenue.

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