Google has launched an antitrust complaint against Microsoft in the European Union (EU), accusing the latter of unfairly awarding licensing contracts for Azure cloud services.
According to a report by CNBC, Google has complained to EU regulators that using Windows Server and Office products on non-Azure cloud infrastructure is difficult and prohibitively expensive because of Microsoft’s licensing terms. This tactic of Microsoft has been alleged by Google to result in a curb in competition in the cloud computing industry, which is believed to be worth several billion dollars. Currently, Google is in third place in the cloud market, behind Microsoft and Amazon.
Google protests Microsoft cloud practices (again)
Google Cloud vice president and head of platform Amit Zavery claimed that customers had to pay a 400% markup by Microsoft to continue using Windows Server on competing cloud providers, reported Reuters. However, this fee is not applicable on Azure.
The search giant claimed that firms running Microsoft’s Office productivity tools suite and other applications on Google Cloud Platform or other rival clouds must pay licensing fees to Redmond.
Google also indicated that the cloud practices of Microsoft have potentially made businesses more vulnerable to security problems.
Zavery, in a CNBC interview, said that Google is of the opinion that Microsoft has been fully violating EU antitrust rules. In response, a spokesperson from Google Cloud reiterated their firm’s commitment to competition in the cloud marketplace. “We would like the cloud market to remain and become very vibrant and open for all the providers including European vendors, vendors like us, AWS and others,” they said.
The complaint by Google follows a recent settlement between Microsoft and the Cloud Infrastructure Services Providers in Europe (CISPE) group which expressed similar concerns about the licensing practices of Redmond.
CISPE decided to revoke its 2022 EU complaint after a deal was reached in July 2024 that enables European cloud providers to offer apps and services of Microsoft on local cloud infrastructure. Google did not figure on the list.
Citing CISPE’s 2023 study, Google stated that European enterprises and public sector firms have been compelled to pay licensing penalties of up to €1bn per annum because of restrictions on the ability of customers to shift from one cloud provider to another.
CISPE continues to campaign on cloud conduct
Meanwhile, CISPE is also establishing an independent European Cloud Observatory (ECO), which will comprise Microsoft, European cloud infrastructure vendors, and European customer associations.
Microsoft has rejected allegations that its cloud practices are hurting competition. Responding to a cloud market study launched by the UK Competition and Markets Authority, the tech giant said that it strongly believes that the cloud services market is functioning properly.
A spokesperson from Microsoft told CNBC that the firm had “settled amicably similar concerns raised by European cloud providers, even after Google hoped they would keep litigating…. having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission.”
Earlier this month, Google was ordered by the EU to pay a fine of €2.42bn after losing a legal battle pertaining to anti-competitive practices.
Read more: Have the hyperscalers broken the UK cloud market?
