Google "bids" €470 million to disrupt Microsoft's CISPE antitrust settlement agreement

According to the Zhītōng Finance and Economics APP, Google (GOOGL.US) has offered a package worth about 470 million euros (512 million US dollars) to a group of cloud computing companies based in the European Union, in an attempt to disrupt their antitrust settlement with Microsoft (MSFT.US). This agreement allowed the US software giant to avoid potentially costly EU cases.

The Cloud Infrastructure Services Providers in Europe (CISPE) withdrew its complaint to the EU antitrust department regarding Microsoft's software licensing practices last week, after reaching an agreement to obtain fairer access to the technology of the American company. CISPE had previously argued that Microsoft bundled its commercial software with Azure cloud services, making it difficult for customers to switch cloud providers.

However, according to confidential documents and sources familiar with the matter, just days before the agreement was announced, Google made a counteroffer aimed at persuading CISPE to maintain its appeal to the EU.

The documents show that as part of a long-term collaboration plan with Google, this deal includes a Google Cloud technology software license worth about 455 million euros over 5 years, as well as 14 million euros in cash.

Sources say that Google's proposal is conditional on CISPE maintaining its EU antitrust complaint against Microsoft for alleged abusive behavior, and it also received a financial donation of around 6 million euros from Amazon AWS as part of their ongoing collaboration with the association.

However, this proposal did not affect CISPE's membership, which includes a large number of European companies. Instead, they chose to accept a proposal that allows them to use enhanced Microsoft Azure capabilities, enabling service providers to offer Microsoft applications and services on their local cloud infrastructure. Sources say that Microsoft will also provide a financial donation of 10 million euros.

AWS stated: "AWS is one of the founding members of CISPE and regularly provides voluntary donations to CISPE. Companies from various industries have long supported industry associations in a similar manner."

Despite Google's long-standing lag behind Amazon and Microsoft in the cloud market, the company has begun to see impressive results. After achieving profitability for the first time last year, Google's cloud computing business reported a profit of 900 million US dollars in the first quarter, well above analysts' expectations of 672.4 million US dollars. With its core search advertising business maturing, Google's cloud division is seen as one of the best growth options for the company.

If regulators increase scrutiny of Microsoft's activities, Google's performance could further improve. If evidence of anticompetitive behavior is found by regulators, the EU investigation could result in fines of up to 10% of global sales – increasing the incentive for companies to settle with the plaintiffs.

A Google spokesperson stated that Google has long supported the principle of fair software licensing and the company is in discussions to join CISPE to combat anticompetitive licensing practices. Amazon did not immediately respond to requests for comment A spokesperson for CISPE stated that members of the association have received alternative proposals from Microsoft, but they refused to confirm any terms of the deal.

Microsoft referenced an earlier statement by its President Brad Smith, in which he expressed the company's satisfaction in resolving the EU's antitrust concerns.

Microsoft has a history of avoiding antitrust scrutiny by reaching agreements with complainants. In 2004, the company paid $9.75 million to a Google-backed organization, the Computer and Communications Industry Association, to withdraw its complaint against Microsoft's conduct before EU regulatory authorities