Google Files EU Antitrust Complaint Against Microsoft’s Cloud Licensing Practices
Published: Sep 25, 2024
Key Takeaways:
- Google has accused Microsoft of anti-competitive software licensing practices that compel customers to choose its Azure cloud services over competitors.
- In July, Microsoft reached a $22 million settlement with some CISPE members to address similar concerns.
- Google is urging the European Commission to enforce regulations that would eliminate Microsoft’s existing restrictions on the use of competing cloud services.
Google has officially lodged an antitrust complaint with the European Commission against Microsoft. The company alleged that Microsoft’s software licensing practices are anti-competitive and effectively force customers to remain loyal to its Azure cloud services.
In 2019, Microsoft introduced software licensing changes that increased the costs for customers running Windows, Windows Server, and Office on competing cloud platforms. In response, the Cloud Infrastructure Services Providers in Europe (CISPE) and a European not-for-profit trade association filed an antitrust complaint with the European Commission in 2022.
In July, Microsoft reached a successful $22 million settlement with a group of CISPE members to avoid a formal investigation into its dominance in the global cloud computing market. This agreement aimed to enable European cloud providers to offer Microsoft applications and services on their local infrastructures. However, Amazon Web Services (AWS) contended that Microsoft’s concessions are limited and only apply to some CISPE members.
Google claims €1 billion annual cost to European businesses due to Microsoft’s licensing practices
In its complaint to the European Commission, Google stated that European businesses and public sector organizations are compelled to pay up to €1 billion annually to run Microsoft software on non-Azure cloud infrastructures. The company is urging EU regulators to require Microsoft to lift its existing restrictions on using cloud services from competitors.
“One, repurchase the software at a much higher price with a 400 percent plus markup, and get a limited product to run on Google or AWS or a lot of other cloud providers. Or go to Azure, because that’s where the easiest path for customers would be, unfortunately, and get the updates and not have to pay any kind of markup. So we believe that time to act is now,” said Amit Zavery, Vice President for Google Cloud.
In a statement to CNBC, a Microsoft spokesperson expressed confidence that the European Commission will dismiss Google’s complaint. “Microsoft settled amicably similar concerns raised by European cloud providers, even after Google hoped they would keep litigating. Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission.”
Google also claims that Microsoft is diminishing the user experience for customers who migrate Windows to competing cloud providers. However, it is still unclear whether AWS will pursue its own antitrust complaint with the European Commission.