[German]Stuttgart-based software company Nextcloud has filed a competition complaint against Microsoft with the German Federal Cartel Office. The accusation is that Microsoft has a dominant market position and is exploiting it. It is about the integration of OneDrive and Microsoft Teams in Windows 11. In the meantime, a competition complaint has also been submitted to the EU Commission by 30 EU organizations because of the same accusations.
Advertising
Competition complaint to the German Federal Cartel Office
According to German finanzen.net, company founder Frank Karlitschek confirmed yesterday (Friday) the Spiegel report about this competition complaint at the German Federal Cartel Office. The competition complaint asks the Federal Cartel Office to initiate a formal review process to determine whether the allegations of anti-competitive behavior by Microsoft are true.
The allegation is that Microsoft has a dominant market position and is exploiting this to thwart competitors. Specifically, the whole thing revolves around Windows 11 and the integration of OneDrive and Microsoft Teams contained therein.
- The Teams collaboration platform [from Microsoft] has a significant market share, Spiegel quotes from the complaint.
- The cloud solution OneDrive also has a significant market share and is therefore in direct competition with Nextcloud.
Nextcloud now argues (imho justifiably) that the deeply integrated connection to OneDrive and the Microsoft cloud in Windows is displayed to Windows users in all relevant work steps.
Who hasn't been annoyed by the OneDrive popups in Windows when users don't want to use this service? Windows constantly requires a OneDrive login and as a user, you have to disable several options to block that. Another cloud integration like Nextcloud's solution is – obviously for me – made more difficult there.
I also expected an EU competition complaint with Microsoft Teams, which is integrated into Windows 11 and advertised with great fanfare. Away from the statement that Windows 11 cannot be used DSGVO-compliant with it, I wrote on July 28, 2021 in the article Windows 11: Microsoft AMA , the HW requirements, app updates and other insights:
Advertising
Well, every management generation at Microsoft has the right to take a beating, and the guys and gals in Redmond are really craving a good thrashing. That's because the integration of Teams into Windows 11 inevitably leads to two conflicts that can't be resolved:
- It is a misuse of the market power of an operating system monopolist, which will certainly result in a complaint from Zoom and other services and, as a consequence, conditions imposed by the antitrust authorities.
- Windows 10 was already not GDPR-compliant, and if the data protection authorities had been honest, there should have been a ban on using this operating system in companies. With the Teams integration in Windows 11, Microsoft saddled another pack on top of that, so that the whole thing does not become more GDPR-compliant.
If Microsoft now announces the cheerful message of Windows 11, it is their right. But for these last two reasons alone, I see a chrash landing by Microsoft in the European Union, where they will probably have to make improvements. Unless Microsoft feels to secure in the meantime that it has politics completely in the bag because there is no alternative. Then the privacy commissioners should declare themselves biased and quit their jobs.
Spiegel Online writes that Microsoft also uses its market power to sell packaged solutions for Microsoft Office and has also created a "unique digital ecosystem across several strategically important markets in the digital sector" with activities in other areas, such as the Bing search engine or end devices. This leads to a "difficult to attack position of Microsoft for competitors".
Also complaint to the EU
U.S. magazine ZDNet writes here, that Nextcloud, along with a coalition of 30 other software and cloud organizations and companies from the European Union (EU) called the Coalition for a Level Playing Field, has filed an official complaint with the European Commission (EC) against Microsoft's anti-competitive behavior by aggressively bundling its OneDrive cloud, Teams and other services with Windows 10 and 11.
ZDNet cites Nextcloud, that the Coalition for a Level Playing Field claims that by pushing consumers to sign up and hand over their data to Microsoft, the Windows giant is limiting consumer choice and creating an unfair barrier for other companies offering competing services. Microsoft has more than 66 % EU market share. Frank Karlitschek, Nextloud's CEO and founder, has been cited by ZDNet as:
This is quite similar to what Microsoft did when it killed the competition in the browser market, stopping nearly all browser innovations for over a decade. Copy an innovators' product, bundle it with your own dominant product, and kill their business, then stop innovating. This kind of behavior is bad for the consumer, for the market, and, of course, for local businesses in the EU. Together with the other members of the coalition, we are asking the antitrust authorities in Europe to enforce a level playing field, giving customers a free choice and giving the competition a fair chance.
The right step at the right time
Nextcloud is both a company and a software product, used in government agencies. The complainant Nextcloud works for the federal government and its Bundescloud, among others, writes Spiegel Online. I think the timing for the competition complaint is favorable and had been long expected by me. The coalition of the soon-to-be new federal government has already announced in its paper that it wants to demand open source solutions and reduce dependencies on Microsoft (Windows, Office) or other large manufacturers. Microsoft's share price dropped by 1.56 percent on the NASDAQ after this news.
Advertising
