German competition watchdog promises to keep a closer eye on Microsoft

Microsoft has become an undertaking of ‘paramount significance for competition across markets’. That’s why the Bundeskartellamt, Germany’s competition supervisor, decided to subject the Redmond-based tech company and its subsidiaries to extended abuse control.

“Microsoft’s many products are omnipresent in companies, authorities and private households and have become indispensable,” says Andreas Mundt, President of the Bundeskartellamt.

He’s referring to Microsoft’s dominant market position in PC and server operating systems Windows and Windows Server, its productivity software Microsoft 365, and the company’s web cloud service Amazon Azure.

“Today Microsoft’s ecosystem is stronger and more closely interconnected than ever before, because overarching all of its activities is the increasing use of the cloud and AI, key technologies in which Microsoft has consolidated its strong position by developing its own products and entering into cooperations,” he adds.

Mundt praises Microsoft for its increasing portfolio, such as gaming (Xbox Live) and professional networking (LinkedIn), and adding innovation to its core products. The company’s open system makes it even more attractive for integration of third parties. The President of the Bundeskartellamt points out that Microsoft is not only successful when entering new markets, but is also able to quickly build strong market positions.

However, we must beware Microsoft’s dominance doesn’t impede competition. Because the U.S. company provides essential parts of the IT infrastructure used by other businesses, third party software developers depend on the framework conditions set by Microsoft. At the same time, Microsoft competes with these companies.

The Bundeskartellamt can prohibit companies which have a dominant market position from engaging in anti-competitive practices.

“We recognize our responsibility to support a healthy competitive environment and we will strive to be proactive, collaborative and responsible in working with the Bundeskartellamt,” a Microsoft spokesperson said to Reuters.

Last week Google filed a complaint with the European Commission, accusing Microsoft of using unfair licensing contracts to lock in clients and exert control over the cloud market.