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Microsoft has avoided U.S. antitrust scrutiny, but Europe is a different matter
By: MarketWatch | December 27, 2021

• Microsoft Corp. U.S. has spent much of the past two years pointing to distrust of its tech rivals, as they suffered from the same type of scrutiny that slammed the Windows maker in the late 1990s.

Now, however, Microsoft is facing pressure of its own, though almost as much as Amazon.com Inc. Not to the extent of AMZN, Apple Inc. AAPL, Google parent Alphabet Inc. GOOGLE, GOOG, and Meta Platform Inc. fb.

But the scrutiny Microsoft faces comes from overseas rather than the US

Microsoft has not made any specific public comment on the legislation or the lawsuits, as none of them are aimed at the software giant, but Microsoft President Brad Smith – the point person in Microsoft’s blame-deflection strategy – has called for an internal company call. The memo acknowledged the unfolding regulatory environment in a report seen by Businesshala in June.

“The world is changing, and Microsoft will change with it,” he wrote. “While our mission to empower others remains unrelenting, governments and countries expect more and different things from us today. We are clearly entering an era of rapidly expanding global technology regulation. But we have been adopting new legal obligations for almost two decades. We have learned what it means to change in a responsible and proactive way. We are well positioned to harness our technology so we can do more than ever to help customers grow, succeed and contribute to a better world.”

Translated to its rivals: Microsoft has bucked antitrust cards to make ground in key technology areas such as mobile and gaming, where Microsoft has lagged behind its rivals, but isn’t too concerned about itself being targeted.

Read more: Microsoft’s vague presence in antitrust push is angering the rest of Big Tech

Like its Big Tech brethren, Microsoft has expanded its business reach through acquisitions into advertising and videogames over the years. But over the past 18 months, the software giant has avoided regulatory lawsuits and investigations that have implicated other big tech firms. Microsoft and its defenders attribute white-glove behavior by regulators to the company following its feud with the Justice Department more than two decades ago.

More on the antitrust challenges facing Big Tech in 2022
Historians may be more inclined to accept Microsoft’s argument that previous antitrust investigations opened the door for Google and Facebook to eventually emerge as strong competitors. The historic clash ended with a 1999 district court ruling that Microsoft’s actions constituted an unlawful monopoly under Section 2 of the Sherman Antitrust Act of 1890. A federal appeals court upheld most of the court’s decisions.

“Microsoft offers a lot of lessons that have been overlooked in today’s antitrust discussion. “Microsoft’s market dominance and its ability to thwart penetration and competition,” Ashley Baker, director of public policy at the Committee for Justice, told Businesshala. The ability to use the business model was underestimated.

That may be true in the US, but overseas Microsoft is the target of a complaint by Nextcloud, an open-source cloud-software company in Europe. Nextcloud allegation Adding Microsoft’s Teams and OneDrive to Windows 11 violates competition laws. Nextcloud said a coalition of companies is joining its effort.

The case of Nextcloud is reminiscent of the CRM of Salesforce.com Inc.
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Slack, which filed a similar complaint with European officials in July for Microsoft’s move to add Teams to Office.

A Microsoft spokesperson said of Nextcloud’s complaint: “People expect modern operating systems to provide secure and reliable communication and storage services, regardless of which provider they are using a computer, tablet, or phone from. It Enables people to connect with each other and share and access files across multiple devices and keep their documents and photos safe if a device breaks down.We use Teams for People in place of or using OneDrive Also make it easier to select and use other communication and storage options, and many people do.”

The EU’s antitrust regulator has hired artificial intelligence and speech technology company Nuance Communications Inc. A brief in-depth look at Microsoft’s $16 billion deal for NUAN.

Asked customers and competitors to prepare a list of concerns, but ultimately approved the deal unconditionally in late December.

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