Cloud infrastructure service providers and their customers are restricted by unfair software licensing terms. To investigate the harm caused, CISPE commissioned renowned economist and expert on competition policy, Professor Jenny, to examine the prevalence and impact of these practices.
Jenny’s research, downloadable here, highlights a broad range of anti-competitive practices confirming the importance of the Principles of Fair Software Licensing launched with Cigref in April 2021. It also suggests a vital role for the proposed Digital Markets Act in identifying certain software vendors as Gatekeepers and ensuing that these behaviours are well covered in its ex ante provisions.
It is clear to all of us that certain legacy software providers are seeking to limit choice in cloud infrastructure through these unfair license terms. Now is the time to act to protect the future growth, innovation and sustainability of European cloud services.
Alban Schmutz,
President of CISPE
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Cloud Infrastructure of Paramount Importance
"As the digitalisation of the economy increases [...] anti-competitive practices could sow the seeds of a future oligopoly, which would harm innovation and competition in this critical marketspace."
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Urgent Action Required
"Lock-in effects, high switching costs, barriers to entry, economies of scale and potential network effects in a fast-growing cloud services market make action particularly urgent."
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Strong Links between Software and Cloud Infrastructure
"Given the strong links between software and cloud infrastructures, anti-competitive practices by legacy software providers can distort competition in the cloud infrastructure services sector and hamper the future of the cloud."
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Distort Competition
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Consolidate Power
"These practices could unfairly consolidate the power of a handful of firms vis-à-vis the whole economy and prevent the creation of the “European Cloud”
“Over the course of several months I have spoken to business software users of all sizes and across sectors. Some users were fearful of possible reprisals if they spoke out against alleged unfair practices. Even some large users of cloud services recognised that they could not do without the core productivity suites that these software companies control.”
Professor Frédéric Jenny
