On Wednesday, Google, a subsidiary of Alphabet, submitted a complaint to the European Commission, accusing Microsoft of engaging in anti-competitive practices designed to lock customers into its Azure cloud platform.
As a major competitor in cloud computing, alongside Microsoft and Amazon Web Services (AWS), Google has raised concerns over Microsoft’s alleged exploitation of its dominant Windows Server operating system to stifle competition. According to Google Cloud Vice President Amit Zavery, Microsoft imposes a 400% price increase on customers who choose to run Windows Server on rival cloud platforms, a policy not applied to Azure users. Additionally, customers using competing cloud services reportedly experience delays and receive fewer security updates compared to those on Azure.
In support of its complaint, Google referenced a 2023 study conducted by cloud services organization CISPE, which revealed that European businesses and public sector entities were collectively paying up to 1 billion euros ($1.12 billion) annually in Microsoft licensing penalties.
Back in July, Microsoft reached a 20-million-euro settlement with CISPE over an antitrust complaint related to its cloud computing licensing practices, effectively avoiding a formal EU investigation. However, this settlement excluded key competitors such as AWS, Google Cloud Platform, and AliCloud, drawing criticism from AWS and Google Cloud. Microsoft asserted that it had amicably resolved similar concerns raised by European cloud providers, suggesting that Google was hoping the issue would continue in court.
“Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission,” a Microsoft spokesperson said in a statement.
Google also accused Microsoft of forcing customers to use its collaboration tool, Teams, even when they preferred alternative options. Zavery warned that Microsoft was applying the same tactics to Azure, further limiting competition in the cloud market.
“The time to act is now,” Zavery urged, emphasizing the need for immediate regulatory intervention. “The cloud market will get more and more restrictive if things don’t happen now.”
Google is calling on the European Commission to take swift action to address Microsoft’s “vendor lock” practices and ensure fair competition in the cloud space. Zavery stressed the importance of maintaining customer choice, stating, “We are asking the European Commission to act now. We’re asking them to really look at this issue, help customers decide and keep the choices going for them.”
Google noted that Microsoft’s Windows Server, along with other Microsoft products, holds more than a 70% market share among European businesses. Historically, Microsoft allowed its products to run on any hardware, including laptops, but since entering the cloud computing business in 2019, it has introduced restrictions.
The cloud computing market in the European Union is growing at a rate of 20% per year, presenting significant opportunities. A McKinsey study published in April found that two-thirds of EU companies have yet to move more than half of their workloads to the cloud, indicating substantial room for growth.
