US cloud giants accused of distorting competition

Then search engines, online advertising or app stores, the cloud. Players in the hosting market and online services for businesses are acting to denounce practices deemed anti-competitive. In the line of sight, the three American groups Amazon, Microsoft and Google, which hold 69% of the market in Europe, according to the company Synergy Research Group. European companies have doubled their turnover in four years … But their market share has fallen from 21% to 16%.

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“There is a concurrency problem in the cloudestimated deputy MoDem Philippe Latombe. So far attention has been focused on consumer markets, but this topic is on the rise. » The French Competition Authority has decided to examine this market: it will launch a public consultation “before summer” and, in early 2023, will build a “ignore”, which will serve as the basis for future investigations. In the United States, a parliamentary report expressed alarm at “techniques that lock in customers”. And Brussels made public, in mid-March, a complaint for abuse of dominant position filed against Microsoft by OVH, France’s head of hosting. “We’re checking it out”we confirm to the European Commission.

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What are the disputed practices? “Microsoft is leveraging the strong position of its Office 365 office software suitesaid Michel Paulin, CEO of OVH. If we want to sell it to our customers, Microsoft offers us a more expensive and technically more stringent license than is given to players who sell its cloud services similarly. “It’s a way of tied selling”criticized Thomas Fauré, CEO of Whaller, a French publisher of collaborative work software.

“It’s dumping in disguise”

Another use considered unfair, the “free cloud credits” : “These offers have values ​​and durations that prevent any competition, and users are eventually captured. It’s dumping in disguise.”, denounced Stéphanie Yon-Courtin, MEP (Renew). Amazon (33% of the global cloud market, according to Synergy) offers start-ups up to 100,000 dollars (95,566 euros) in credits on its services within a year, including software. In a report, the company is pleased that it has been distributed “hundred million euros” in Europe and become a service provider for 75% of the forty largest French start-ups.

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Microsoft (20% market share) has a similar program. Initially less generous, Google (10% of the market) raised its credits in January to $ 200,000 over two years. Some start-ups will even reach the United States, according to the site Business Insider. “We don’t have that deep pockets. There is a distortion of competition ”complaint by Yann Lechelle, who heads Scaleway (a subsidiary of Free, founded by Xavier Niel, an individual shareholder of world). This host and software publisher now offers start-ups up to 36,000 euros, but “You do not want” rise to 100,000 euros, a figure which OVH itself ranks, by the end of 2020.

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“Start-ups are tempted by cloud creditsexplained Maya Noël, director general of the association of young digital companies France Numérique. But there is a risk of dependency, because it is difficult to change suppliers. » That’s why Digital France is begging “interoperability”, which allows you to switch from one service provider to another. Also accused Amazon, Microsoft or Google of retaining customers thanks to exit fees, these fees are charged to transfer data to another host. In mid -2021, American Cloudflare accused Amazon of taking up “80 times the actual relocation costs”. Soon, the latter increased from 1 to 100 gigabytes of data that could be transferred for free.

In the eyes of lawmakers

Under pressure, Amazon defended itself: “Customers continue to use our cloud services for value, not because of technical or cost constraints. » “We are against technological lock-in”also appeals to Google, saying “to help” customers to transfer their data. Microsoft denied “lock” market, while qualifying: “All the arguments of the complaint [d’OVH] is not valid, but some are, and we will make changes to accommodate them ”said the company to FinancialTimes.

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Large cloud companies know they are in the sight of lawmakers. “Obligations prevent them from retaining customers improperly, by legal or technical means”, we explained to the European Commission. The future European Digital Markets Act will prohibit them from promoting their own services and will promote interoperability. The Brussels proposal for the Data Act on industrial data plans to limit outgoing transfer costs, then to “lost”, for three years. Despite this, French players remain active and also dream of a Buy European Tech Act, which will reserve part of the public cloud and digital orders for Europeans.

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