Microsoft is in the hot seat in South Africa

 ·5 Apr 2024

Microsoft’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.

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

The move, likely in the coming days, could set the stage for a legal battle that could result in 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, which is currently subject to an informal investigation by 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 the visibility of smaller South African companies in search results and pay for the training of smaller platforms.

Officials are currently probing whether artificial intelligence models and 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.

Read: Work-from-home shift could save South Africans up to R2,900 a month

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