Google is asking the UK’s Competition and Markets Authority to closely investigate Microsoft for abusing its position in the UK cloud market, it has been reported.
The tech giant claims that its rival in the sector is manipulating licensing restrictions on its software products to ensure that enterprise customers do not switch from Azure’s cloud to other competitors. The CMA is already investigating the US hyperscale cloud providers – Microsoft Azure, Google Cloud and Amazon’s AWS – for anti-competitive practices in the UK cloud market.
Google Cloud specifically accused Microsoft of raising its prices whenever customers wished to deploy alternative software in the latter’s cloud. As such, it wrote in a letter to the CMA and seen by Reuters that: “UK customers are left with no economically reasonable alternative but to use Azure as their cloud services provider, even if they prefer the prices, quality, security, innovations, and features of rivals.”
These practices, it continued, constituted a direct barrier to competition in the UK cloud market, which is dominated by hyperscalers. The trio hold an estimated 70–80% market share, with Google Cloud accounting for 5–10% of this.
Google Cloud’s vice-president, Amit Zavery, claimed it had committed to facilitating multi-cloud solutions for its customers. “A lot of our software and cloud services interoperate and can run on AWS or on Azure as well,” Zavery told Reuters, warning that without such a commitment, innovation within the industry would decrease. He added that similar abuse of licensing restrictions was not taking place at public cloud market leader AWS. This is perhaps not surprising given that, unlike its two rivals, Amazon’s cloud platform is primarily concerned with the infrastructure layer of the cloud rather than the services which run on top of it.
Google’s letter to the CMA is not the first of its kind
Google made similar allegations against Microsoft in a letter to US regulators earlier this year. Nevertheless, it was an important issue to impress on the CMA, UK Cloud’s former commercial director Nicky Stewart told Tech Monitor. “It’s a concern for many cloud hosting providers, not just competing hyperscalers,” she added, pointing out that Microsoft had already offered to settle cases brought against it by EU-based cloud providers on similar grounds.
Microsoft robustly defended its practices in the cloud, claiming that recent data showed that competition between cloud hyperscalers remained healthy. A spokesperson added that the firm had recently updated its licensing terms and conditions in response to concerns about competition, as well as collaborated with independent cloud providers to address concerns about interoperability and other issues.
Microsoft Azure, AWS and Google Cloud are all under investigation by the CMA for anti-competitive practices in the UK cloud market, following a market study by media regulator Ofcom that concluded such practices were rife. While that report Google Cloud was recognised as “one of the biggest adopters and promoters of open-source technologies”, it was also identified by smaller cloud providers as pursuing aggressive pricing strategies and charging similar egress fees to Microsoft.
Read more: Have the hyperscalers broken the UK cloud market?
