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Google filed a complaint against Microsoft with the European Commission on Wednesday. In it, Google accused Microsoft of making it prohibitively expensive for cloud customers to move their work from Azure to other providers, like Google Cloud.
Google claims Microsoft’s cloud licensing terms restrict European customers from switching to competing cloud platforms despite “no technical barriers to doing so.” In a blog post explaining its complaint, Google wrote that Microsoft’s practices have “significantly harmed European companies and governments,” costing European businesses €1 billion ($1.1 billion) annually, wasting taxpayer money and stifling competition.
Amazon’s AWS leads Europe’s cloud market. Microsoft’s Azure is second, followed by Google in third. Oracle, Salesforce and IBM rounded out the top six in Q2 2024.
On Wednesday, a European Commission spokesperson confirmed to Engadget that the EU governing body received Google’s complaint. “We will assess it according to our standard procedures,” EC spokesperson Lea Zuber wrote.
Google’s complaint referred to a settlement this summer between Microsoft and CISPE (Cloud Infrastructure Service Providers in Europe), the trade body for Europe’s cloud industry. The latter filed a complaint against Microsoft in late 2022, accusing the company of anti-competitive practices with Azure (strikingly similar to Google’s complaints from today). The full details of the settlement, which led to CISPE withdrawing its complaint, weren’t made public. CISPE wrote in July that Microsoft would make changes to address its concerns. Those included releasing an enhanced version of the Azure Stack HCI, which would bring features that Microsoft’s customers enjoy to European cloud providers.
In a statement to Engadget, Microsoft was optimistic that the EC would dismiss Google’s complaint. “Microsoft settled amicably similar concerns raised by European cloud providers, even after Google hoped they would keep litigating,” a Microsoft spokesperson wrote, referring to a Bloomberg report that Google offered a $500 million alternative deal to keep the antitrust complaint alive. “Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission,” Microsoft’s spokesperson wrote.
Google says Windows Server is at the heart of its complaint. Describing it as “a must-have workhorse in many IT environments,” the company says Microsoft changed its practices after cloud computing became a more lucrative business. “But as Azure faced more competition, Microsoft introduced new rules that severely limited customer choice,” Google wrote.
Google said the licensing terms Microsoft adopted in 2019 “imposed extreme financial penalties” on companies who wanted to use Windows Server software with Azure competitors like AWS and Google Cloud. “Microsoft’s own statements indicate that customers who want to move their workloads to these competitors would need to pay up to five times more,” Google wrote, citing an archived 2023 webpage comparing Azure pricing to that of AWS. Google said Microsoft also limited security patches and created other barriers to choice in cloud providers.
Google also linked to research from Professor Frédéric Jenny, a French economist and chair of the OECD Competition Committee. The study claims that European companies and government organizations pay “unfair, additional costs” to customers who license software to run on cloud infrastructure from independent service providers. Professor Jenny claimed those choosing non-Microsoft cloud providers “sucked an additional €1,010,394,489 out of the European economy in 2022.”
Google Cloud’s Head of Platform Amit Zavery wrote on Wednesday that Microsoft’s practices lock customers into Azure, hurt cybersecurity and limit innovation. Zavery also spoke with CNBC, advocating for a more open market for cloud providers. “Today the restrictions [do] not allow choice for customers,” he said. Zavery wants Microsoft’s restrictions “to be removed and allow customers to have and choose whatever cloud provider they think is best for them commercially and technically.”
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