Alphabet’s Google has lodged a complaint with the European Commission, accusing Microsoft of anti-competitive behavior in its cloud computing services.
The complaint, filed on Wednesday, claims that Microsoft is using its dominant position in the Windows Server operating system to lock customers into its cloud platform, Azure, stifling competition from rivals like Google Cloud and Amazon Web Services (AWS), Reuters news report said.
Europe is a key market for Microsoft, Google Cloud and AWS. Research report from IDC says the size of the public cloud services market in Europe will be $291 billion in 2027 from $142 billion in 2023.
A Eurostat report said 42.5 percent of EU enterprises bought cloud computing services in 2023, mostly for e-mail, storage of files and office software. The share of enterprises buying cloud computing services in the EU increased by 4.2 percentage points in 2023 compared with 2021.
Amit Zavery, Vice President at Google Cloud, says Microsoft imposes hefty financial penalties on users who run Windows Server on competing cloud services, with a reported 400 percent mark-up. Customers using rival platforms face delays and limitations in receiving security updates, a disadvantage not applied to Azure users.
Google highlighted findings from a 2023 study by CISPE, a cloud services organization, which estimated that European businesses and public sector bodies are paying up to €1 billion ($1.12 billion) annually in Microsoft licensing penalties.
These licensing practices have been a point of contention, with Microsoft previously settling a 20-million-euro antitrust complaint in July 2023 over its cloud licensing practices. However, the settlement excluded major rivals like AWS and Google Cloud, drawing criticism from both.
In response, a Microsoft spokesperson claimed that Google’s efforts were aimed at continuing litigation, stating, “Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission.”
Google’s complaint also accuses Microsoft of bundling its collaboration app, Teams, with other products, pressuring customers to stick with Microsoft tools. Google’s Amit Zavery warned that without regulatory intervention, the cloud market would become increasingly restrictive.
The European cloud market is rapidly expanding, with a 20 percent annual growth rate. A McKinsey study in April revealed that two-thirds of EU companies have yet to transition more than half of their workloads to the cloud, highlighting the market’s untapped potential. Google is calling on the European Commission to address Microsoft’s practices and ensure fair competition in this critical sector.
