Google accuses Microsoft of unfair business practices, files antitrust complaint

Google has filed an antitrust complaint with the European Commission, accusing Microsoft of using unfair licensing contracts to smother competition in the cloud computing industry.

Microsoft is one of the biggest cloud service providers in the world. According to Google, the Redmond-based tech company has earned this spot by enabling unfair licensing terms to lock in clients and exert control over the cloud market.

Amit Zavery, Google’s Cloud Vice President, said in a briefing that Microsoft is exploiting its dominance of its Windows Server operating system to tackle competition. By charging a 400 percent mark-up to keep Windows Server running on the systems of rival cloud computing providers, Microsoft practically condemns customers to stick with Microsoft Azure.

On top of that, users of rival cloud systems would also receive less and more limited security updates compared to clients of Microsoft Azure, which hurts cybersecurity and undermines innovation.

“The time to act is now. The cloud market will get more and more restrictive if things don’t happen now. 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,” Zavery said to Reuters.

In an interview with CNBC, he said Google believes that Microsoft is ‘one hundred percent’ in violation of EU antitrust rules.

“We would like the cloud market to remain and become very vibrant and open for all the providers including European vendors, vendors like us, AWS and others. Today the restrictions do not allow choice for customers. So, we would want those restrictions to be removed and allow customers to have and choose whatever cloud provider they think is best for them commercially and technically,” Zavery added.

According to a 2023 study by CISPE, a trade body for the cloud computing sector, Microsoft annually received up to one billion euros from European businesses and public sector bodies on licensing penalties.

To avoid an investigation by the European Commission, Microsoft agreed to pay a € 20 million settlement about its cloud computing licensing in July 2024. However, Google didn’t have a say in the matter, which prompted criticism.

“Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission,” a Microsoft spokesperson told Reuters and other media outlets.