Microsoft threatens to sue if Azure is targeted in EU-US tariff war

Microsoft threatens to sue if Azure is targeted in EU-US tariff war

Microsoft president Brad Smith told an event in Brussels that they "will take on all-comers if they try to take down Azure cloud".

Published on 1st May 2025

Microsoft president Brad Smith has vowed that the company will take vigorous legal action should it be ordered to suspend or cease cloud operations in Europe by the US or any other government.

Smith was formerly the company’s chief legal officer, elevated to president in 2015, having joined the company in 1993.

He made the pledge at an event in Brussels, Belgium and reiterated his remarks in a blog posting on the company’s website. They came during a lull in the trade war between the US and Europe, which had seen the imposition of hefty tariffs on EU exports to the US, which had been met with tit-for-tat tariffs imposed on US exports by the EU.

“In the unlikely event we are ever ordered by any government anywhere in the world to suspend or cease cloud operations in Europe… Microsoft will promptly and vigorously contest such a measure using all legal avenues available,” said Smith.

It wouldn’t be the first time that Microsoft had filed suit against the US government, he added. During both Obama’s and Trump’s first presidential tenure Microsoft filed suit against the US government, to protect data privacy and to uphold employee rights.

Microsoft has already hedged its geopolitical bets in its cloud build-out in Europe by allying with local partners to build “sovereign cloud datacentres”.

For example, in France it formed a joint venture with services firm Capgemini and mobile telecoms group Orange, called Bleu. This is intended to provide a trusted cloud platform based on Microsoft technology, but fully subject to local laws and regulations in a way that can’t easily be legally Trumped.

A similar arrangement has been established in Germany with SAP and Bertelsmann IT subsidiary Arvato Systems, called Delos Cloud, a sovereign cloud platform for the German public sector, hosted in German datacentres and run by German personnel.

Moreover, he continued, the company was adding what he described as a legally binding European Digital Resilience Commitment, encompassing both Microsoft and all its subsidiaries, into its contracts with national governments in Europe and the European Commission.

More broadly, Microsoft also partners with independent cloud providers across Europe to provide its platform, application and services on local cloud infrastructure “on more favourable terms that we make available to Amazon and Google”, said Smith.

And, should the worst come to the worst, the company has made contingency arrangements for operational continuity “in the unlikely event Microsoft were every required by a court to suspend services”.

However, Smith is confident that the company will not need to go to court, let alone put into action such contingencies.

“We were pleased the Trump administration and the European Union recently agreed to suspend further tariff escalation while they seek to negotiate a reciprocal trade agreement. We hope that successful talks can resolve tariff issues and reduce non-tariff barriers,” said Smith.

The warning came at the same time that the company pledged to expand its datacentre capacity in Europe by 40% over the next two years, expanding operations in 16 countries. This includes a €3.2 billion investment in AI-capable datacentres in Germany alone as part of an $80 billion global AI datacentre investment spree

Source

Image Credit

Aleks Taurus via Deposit Photos

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