Google Files Complaint with EU Over Microsoft’s Cloud Practices

Alphabet’s Google filed a complaint with the European Commission on Wednesday, accusing Microsoft of using anti-competitive practices to lock customers into its Azure cloud platform.

Google, whose main cloud competitors are Microsoft and Amazon Web Services (AWS), claimed Microsoft is leveraging its dominant Windows Server operating system to limit competition.

Amit Zavery, Vice President at Google Cloud, stated that Microsoft charges a 400% mark-up for customers to run Windows Server on rival cloud platforms, a fee not imposed on Azure users.

Additionally, customers using non-Microsoft platforms receive delayed and restricted security updates, Zavery added.

Google cited a 2023 study by CISPE, a cloud services organization, which found that European businesses and public sector entities were incurring up to 1 billion euros ($1.12 billion) annually in Microsoft licensing penalties.

In July, Microsoft reached a 20-million-euro settlement with CISPE regarding its cloud computing licensing practices, avoiding an EU investigation. However, this settlement did not cover AWS, Google Cloud Platform, or AliCloud, leading to criticism from the excluded companies.

Microsoft responded, saying it had resolved similar concerns raised by European cloud providers and argued that Google’s complaints would likely not convince the European Commission.

Also Read: Cloud computing: Google intensifies criticism against Microsoft

“Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission,” a Microsoft spokesperson said.

Google also accused Microsoft of locking customers into its Teams collaboration application, even when they preferred alternative solutions, and warned that Microsoft was applying the same strategy to its Azure platform.

“The time to act is now,” Zavery urged, adding that without intervention, the cloud market would become increasingly restrictive.

Google emphasized that regulatory action is necessary to end Microsoft’s “vendor lock” and create a level playing field for competitors.

 “We are asking the European Commission to act now, review the issue, and protect customer choice,” Zavery said.

The complaint highlighted that Microsoft’s Windows Server and associated products hold over 70% of the market share in European businesses. While Microsoft products were once compatible with various hardware, restrictions were introduced in 2019 as Microsoft expanded its cloud business.

With the EU cloud computing market growing at around 20% annually, a recent McKinsey study showed that two-thirds of EU companies still have less than half of their workloads on the cloud, indicating significant growth potential.

Reuters