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Highlights:
- Google (NASDAQ:GOOGL) has filed an anti-competition complaint against Microsoft (NASDAQ:MSFT) with the European Commission over its Azure cloud platform.
- The complaint alleges Microsoft’s licensing terms impose barriers to customer migration and raise costs, hindering competition in Europe.
- Google claims Microsoft’s practices have caused €1 billion in harm to European businesses and government entities in 2022.
Google LLC (NASDAQ:GOOGL) has filed a formal complaint against Microsoft Corporation (NASDAQ:MSFT) with the European Commission, accusing the software giant of employing anti-competitive licensing practices to limit customer flexibility in the cloud computing space. The complaint centers on Microsoft’s cloud services, specifically targeting its Azure platform, and follows Google's ongoing concerns about Microsoft's restrictive terms that allegedly hinder competition in the European market.
In its statement on Wednesday, Google Cloud claimed that Microsoft is utilizing "legacy licensing practices" to prevent European customers from migrating their existing Microsoft workloads to other cloud providers. According to Google, Microsoft’s terms either restrict such transitions entirely or impose significant cost barriers, such as a reported 400% price increase, which discourages customers from exploring alternative options. Google argued that this creates an unfair advantage for Microsoft and undermines competition in the cloud computing sector.
The complaint draws parallels to the European Commission’s ongoing scrutiny of Microsoft’s bundling of its Teams collaboration software, alleging that the company is using a similar strategy with Azure. Microsoft’s alleged tactics have resulted in what Google describes as a €1 billion adverse impact on European businesses in 2022 alone, citing a recent industry study. Google contends that these practices have harmed both companies and government entities across the continent by driving up costs and reducing choice.
Google stated that it had previously tried to engage Microsoft in discussions over fair and open cloud licensing terms. However, instead of resolving the issues, Microsoft reportedly chose to settle disputes with other cloud service providers earlier this year, leading to the withdrawal of a separate antitrust complaint. Despite these developments, Google has decided to proceed independently, citing ongoing customer dissatisfaction and a need for regulatory intervention.
In response to Google’s formal complaint, the European Commission is expected to review the matter in light of its broader investigation into Microsoft’s business practices, which include separate concerns over its bundling of Teams with its Office software suite. The outcome of the investigation could have significant implications for how cloud services are licensed and offered across Europe.
