Nextcloud for DIE ZEIT: Microsoft’s anti-competitive behavior, PR stunts and salami slicing

DIE ZEIT, a prominent German outlet, interviewed Nextcloud’s founder Frank Karlitschek for a story on Microsoft’s anti-competitive behaviour on the European office software market. The article addresses a history of Microsoft’s practices that grant the tech giant a possible illegal advantage over local competition, an ongoing litigation with the EU Commission, and possible legal solutions to restore a level playing field for the providers in Europe.

Your can access the original text in German on ZEIT ONLINE website. Continue reading for a recap of the article and the key takeaways.

Since the original article is in German language, all direct quotes used in this blog are translated.

“Does it always have to be Microsoft?”

This is how the original title sounds like, if translated to English. Starting off with Frank’s monthly video calls with the EU commission, Leon Werner introduces Nextcloud’s struggle with the world’s wealthiest company: by employing a range of tactics and making use of its dominant position, Microsoft gains an unfair advantage over the competition and leaves no room for small providers like Nextcloud.

Since 2017, Microsoft had bundled Teams app with its Office offering, driving providers of videoconferencing and chatting apps out and locking Office customers tighter to the Microsoft ecosystem. After an EU Commussion warning following complaints made not only by Nextcloud, but other companies like Slack, Microsoft made a move to sell Teams separately at a symbolic one or two euro fee, thus slowing down the antitrust case.

If services such as cloud storage or Teams were included free of charge, other providers such as Nextcloud would be deprived of their livelihood.

Quote from the ZEIT ONLINE article

Daniel Zimmer, an antitrust law expert and former chairman of the Monopolies Commission, also claims that the network effect still allows Microsoft to stay dominant in the market. “These prices will not ensure that companies will look for a replacement for Teams,” says Dennis-Kenji Kipker, Professor of IT Security Law at the University of Bremen.

Kipker believes that antitrust proceedings are made once damage has already been done. He calls it a “salami-slicing tactic”, a calculated approach that has a long tradition at Microsoft. For example, an article by Wall Street Journal, published in July 2022, explains how Microsoft employs its army of lawyers and lobbyists to push back on its legal challenges with the EU.

The company [Microsoft] always goes two steps ahead in advance, only to go one step back afterwards.

Dennis-Kenji Kipker, IT law expert.

Could Digital Markets Act restore the fair play?

In the 1990s, Microsoft already bundled Internet Explorer with Windows, leading to antitrust actions in the US. Frank Karlitschek wants similar measures for cloud services under the EU’s Digital Markets Act (DMA), which aims to limit the power of large digital platforms like Microsoft, Apple, and Google to ensure fair competition.

While the DMA, effective since March, is able to regulate some aspects of gatekeeping like brand positioning and interoperability, the scope of affected services remains too narrow. it hasn’t targeted Microsoft’s cloud services that squeeze out numerous smaller providers from the market — as they don’t meet the current threshold of 10,000 business customers. Notably, the DMA only relies on self-assessment, and no cloud provider has reported meeting the criteria so far.

The hope remains that future actions of the EU Commission will more effectively curb the dominance of large cloud providers. To this day, multiple voices have spoken in support of the cause.

The antitrust initiative lead by Nextcloud

Big Tech is harming EU businesses and consumers alike. Many European companies realize that, and this is how a Coalition for a level playing field emerged. To resist harmful effects of Microsoft’s tech monopoly, the Coalition demands an end to gatekeeping practices and establishment of open standards and interoperability that make an easy migration possible.

Learn more at antitrust.nextcloud.com