In the realization of digitalization, which is one of the indispensable elements of the information society, it is of great importance that incredible amounts of data are collected in data centers for processing. Data center operators, which are the connection point of the virtual world with the real world, have been forced to struggle with the unfair and unlawful transactions of a monopoly international companies for years, both in Europe and in Turkey. That’s why TELKODER took Microsoft to court. Here are the details…
TELKODER took Microsoft to court!
The Free Telecommunication Operators Association (TELKODER), which has been working on solving the problems of its member data center operators with Microsoft, especially on the basis of software licenses since 2017, held a meeting recently with the representatives of the Cloud Infrastructure Services Providers (CISPE) in Europe, both in Turkey and in Turkey. While drawing attention again to the license fees and its impact on the competition area, which is a bleeding wound in the field of cloud infrastructure services in Europe, the debate has flared up again with Microsoft’s current practices for data center operators in Turkey and especially with a report recently announced by CISPE.
While Microsoft requests detailed information about their customers from the data center operators that it provides access to through KPMG, which it has authorized, it avoids signing texts such as confidentiality agreements that reflect the legal assurance rights of data center operators.
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On the other hand, the fact that both Microsoft, which provides software services to data center operators, and cloud services at retail level, and that there are no legal obstacles/guarantees preventing it from abusing its current monopoly position through vertical integration, cause the process to remain unresolved.
Professor Jenny’s report is remarkable: they pay billions of Euros in “additional taxes” to Microsoft
This is also the case in Europe. A report released recently by CISPE, which is fighting against these unfair practices of Microsoft across Europe, shows that the social costs of unfair practices are also quite high.
According to the report by Professor Jenny, European businesses and the public sector pay billions of Euros in “additional taxes” to Microsoft each year to be able to run their software on the cloud infrastructure of their choice.
Professor Jenny compared the licensing costs of running Microsoft SQL Server on Microsoft Azure Cloud with an independent cloud service provider and said that additional fees are charged to those who choose a cloud service other than Microsoft Azure Cloud, and this figure is 1 Billion 10 Million 394 489 for the European economy for 2022. He calculated that it incurs an additional cost of €.
Applying the same model to the widely used Office 365 Suite, it found that additional fees paid to Microsoft for use in non-Microsoft Azure Cloud clouds were €560M more per year. These results represent an additional 28% gain or “tax” over software license used from a third-party cloud service provider.
This Microsoft “tax”; Instead of growth, innovation, faster and more effective digital transformation, unfair software license fees are going towards unfair costs, and these unfair costs are likely to lead consumers to buy these software at higher prices.
Legal processes begin for resolution
Based on Professor Jenny’s report, CİSPE invited the European Commission to act quickly to put an end to these unfair, unnecessary and unilaterally applied software license “taxes”. told:
“As TELKODER, we have been working for a long time to ensure competition in our sector and to ensure that our member companies make the maximum contribution to the digital transformation of our country. In recent years, we have not seen any positive steps from our interlocutor Microsoft regarding problematic license fees and some applications in the field of cloud infrastructure services. One of the important points of the work is that the same problems are experienced throughout Europe and the issue has been brought to a legal dimension by CISPE.
The framework of the Microsoft Service Provider License Agreement (SPLA) should first be made open to negotiation, and then it should be harmonized with the public obligations and service delivery methods of data center operators in a mutual dialogue environment.
Microsoft is expected to adopt an approach that considers the conditions of our country, the competitiveness of the contracts, and the convenience of the industry in terms of sustainability. However, the point we have reached does not give much hope, and it has started to cause a serious social cost for our country. We are now getting ready to take the issue to the legal field like our European colleagues.”