Google filed an antitrust complaint with the European Commission on Wednesday, accusing Microsoft of using unfair licensing contracts in its Azure cloud computing business to stifle competition. The complaint comes as Google, which ranks third globally in the cloud computing market behind Amazon Web Services and Microsoft Azure, alleges that Microsoft makes it harder for customers to migrate their workloads to competitors’ clouds. Google argues that Microsoft’s dominant Windows Server and Microsoft Office products are used to strengthen its position in the cloud market by imposing restrictions that hinder customers from moving their data and applications to other cloud providers.
Google’s complaint highlights that European businesses and public sector organizations have been forced to pay up to 1 billion euros ($1.1 billion) annually in licensing penalties due to restrictions placed by Microsoft, as cited in a 2023 study by CISPE, a trade body for the cloud computing sector. Microsoft responded by noting that similar concerns raised by European cloud providers were settled amicably, and expects the European Commission to dismiss Google’s complaint. A Google spokesperson identified a “tax” imposed on companies running Microsoft Office on competing cloud platforms, attributing high licensing fees as a barrier to competition.
Google’s antitrust concerns over Azure
Furthermore, Google suggested that Microsoft’s practices have potentially heightened security risks for businesses. Amit Zavery, Google Cloud’s head of platform, stated in an interview that Google believes Microsoft is in violation of EU antitrust rules.
He emphasized the need for a vibrant and open cloud market that allows customers the freedom to choose their cloud provider based on commercial and technical merits, without facing unjust restrictions. Following the July agreement, CISPE noted that Microsoft would collaborate with its members to enhance Azure Stack HCI, ensuring it offers the same features as Microsoft’s Azure product. Google, however, disagreed with the settlement, arguing that it did not adequately address competition concerns, and chose not to participate.
Amazon Web Services and Alibaba’s cloud unit, both CISPE members, also opted out of the settlement. Microsoft maintains that its cloud practices do not impede competition, asserting that the cloud services market is functioning effectively.
