Microsoft faces legal battle in South Africa

The pending case mirrors the tech giant's ongoing legal battles in European countries

Microsoft faces legal battle in South Africa
Azure's cloud licensing malpractices to be looked into

The antitrust agency of South Africa, the Competition Commission (CompCom) is on the move to open an investigation into Microsoft Azure's cloud computing licensing practices in the country.

The Commission, according to Reuters, is pointing fingers at the tech giant for charging local businesses an arm and leg to switch their cloud licenses to other vendors. Much about the probe remains under wraps, but it mirrors trends the services face elsewhere.

In Europe, Microsoft's cloud offerings have been subjected to scrutiny over similar concerns. The European Union (EU) has since taken legal action against the software giant following complaints from its rivals over its licensing practices.

In November 2022, the Cloud Infrastructure Services Providers in Europe (CISPE), a 26-firm-strong trade body, filed a complaint with the EU's antitrust watchdog, the European Commission, with claims that Microsoft's cloud software licensing terms were detrimental to the Union's cloud ecosystem.

The companies alleged that some of Microsoft's practices were anti-competitive and that it charged customers more to run its software in non-Microsoft cloud environments, describing it as a restrictive licensing policy. To avoid the battle, the company began liaising with the CISPE, though a resolution remains in the works.

A similar scenario is playing out in the United Kingdom, where the competition regulator has launched a probe into the cloud market and considering how the terms offered by Azure could be inhibiting healthy competition in the market.

While the South African case is yet to materialize, Microsoft stands to forfeit up to 10% of its local revenue as fine payment. Given the country's upfront approach when it comes to business regulations, an unraveling is expected.

Meanwhile, across the continent, inflation and currency devaluation have compounded the costs associated with cloud computing with the firm, raising concerns and stirring conversations regarding the needed emergence of homegrown alternatives.

Get weekly insights on tech startups and VC in Africa