Google Takes Stand: Files Major Complaint Against Microsoft’s Unfair Azure Cloud Practices – EU Investigation Ensues | Tech News

Google Accuses Microsoft of Anti-Competitive Cloud Practices in EU Complaint

Last Updated: Sep 25, 2024 | 6:16 PM IST
By Business Standard Staff | 3 min read

Alphabet’s Google has lodged a formal complaint with the European Commission, accusing Microsoft of leveraging its dominant Windows Server operating system to stifle competition in the cloud computing market. According to Google, Microsoft’s practices are aimed at locking customers into its Azure platform.

Google Cloud Vice President Amit Zavery highlighted that Microsoft imposes a staggering 400% markup on customers who choose to run Windows Server on competing cloud providers, a cost that doesn’t apply to Azure users. Furthermore, Zavery pointed out that users on rival systems receive delayed and inferior security updates.

A 2023 study by CISPE, a cloud services organization, found that European businesses and public sector bodies incur up to €1 billion annually due to Microsoft’s licensing penalties.

In July, Microsoft settled an antitrust complaint for €20 million regarding its cloud computing licensing practices with CISPE, thereby avoiding an EU investigation. However, this settlement did not involve major competitors such as Amazon Web Services (AWS), Google Cloud Platform, and AliCloud, igniting further criticism.

Google has also accused Microsoft of bundling its collaboration tool Teams with Azure, even when customers prefer other alternatives. Zavery emphasized the urgency, stating, “The time to act is now. The cloud market will get more and more restrictive if things don’t happen now.” According to Google, only regulatory intervention can dismantle Microsoft’s "vendor lock" and foster a fair competitive environment.

The company urged the European Commission to address this issue promptly, warning that Microsoft’s products hold over 70% market share in European businesses. Google pointed out that Microsoft, which previously allowed its products to function on any hardware, restricted such interoperability beginning in 2019 as it expanded into cloud services.

With the EU’s cloud computing sector growing by 20% annually, there is significant potential for market expansion. A recent McKinsey study revealed that two-thirds of EU companies still have less than half of their workloads on the cloud. Google’s complaint underscores the critical need for regulatory scrutiny to ensure a diverse and competitive cloud market.

First Published: Sep 25, 2024 | 6:16 PM IST

Original Story https://www.business-standard.com/technology/tech-news/google-files-complaint-to-eu-over-microsoft-s-azure-cloud-practices-124092500990_1.html
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