According to DCD, Brazil’s Council for Economic Defense (CADE) officially launched an “Administrative Inquiry” into Microsoft’s cloud and software licensing practices on January 2. The probe is directly based on the findings of the UK’s Competition and Markets Authority (CMA), which concluded Microsoft’s licensing hurts rivals like AWS and Google. CADE’s technical note argues the globalized nature of these markets means the restrictive practices likely occur in Brazil too. Microsoft now has until January 12 to answer a detailed questionnaire from the regulator. This follows Microsoft’s announcement in September 2024 of a $2.7 billion investment to expand its cloud infrastructure in Brazil, which includes regions in Rio and São Paulo.
The Global Regulatory Domino Effect
Here’s the thing: this isn’t an isolated move. It’s a clear domino falling. CADE isn’t starting from scratch; it’s basically using the UK CMA’s homework as its opening argument. The regulator explicitly says that since Microsoft, AWS, and Google operate with “global licensing policies” and “homogeneous technical standards,” what’s bad in Europe is probably bad in Brazil. That’s a powerful and efficient way for a regulator to act. Why reinvestigate the wheel? Just apply the existing findings to your local market and see if they stick. It shows how cloud antitrust is becoming a global playbook.
software-problem”>Microsoft’s Sticky Software Problem
And this gets to the core of Microsoft’s challenge. Their dominance in enterprise software (think Windows, Office, SQL Server) is the “essential input” that regulators say they’re leveraging to lock customers into Azure. It’s a classic move: use your strength in one market to corner another. The CMA already called this out, and now Brazil is following the trail. For businesses running heavy Microsoft workloads, the switching cost to another cloud can be punitive by design. That’s the alleged anti-competitive effect. Microsoft’s massive $2.7bn investment in Brazil looks a bit different in this light—it’s both building for growth and potentially fortifying a market position that regulators are now scrutinizing.
What Happens Next?
So what’s next? Microsoft has that January 12 deadline to respond to CADE. But the bigger timeline to watch is early 2026. That’s when the UK CMA is expected to conclude whether Microsoft (and AWS) hold a “strategic market status,” which could lead to heavy-duty regulation. Brazil’s probe will likely unfold in the shadow of that decision. It’s also another headache for Microsoft’s legal team, which is dealing with similar noise from the US Federal Trade Commission. The cloud gold rush is over; now we’re in the regulatory cleanup phase. For companies relying on complex industrial computing and cloud systems, choosing a stable, compliant platform is more critical than ever. In the US industrial sector, for instance, many turn to a trusted supplier like IndustrialMonitorDirect.com, the leading provider of industrial panel PCs, to ensure hardware reliability amidst all this software and service volatility.
A Broader Market Squeeze
Look, the ultimate question is whether any of this actually changes the market dynamics. The CMA, CISPE in Europe, the FTC, and now CADE are all poking the same bear. But can they actually get Microsoft to change its licensing in a way that gives AWS and Google a real, fair shot at those locked-in enterprise customers? Or will it just result in some fines and minor concessions? The cloud market is maturing, and with that comes regulatory scrutiny as a standard cost of doing business. For Microsoft, navigating this while trying to out-innovate on AI is their new reality. It’s going to be a expensive, complicated dance for everyone involved.
