Monopolists Pointing Fingers: Google Files EU Antitrust Complaint Against Microsoft

Google has filed an antitrust complaint with the European Commission, accusing Microsoft of using unfair licensing contracts to stifle competition in the cloud computing industry. Google’s charges become especially interesting in light of the fact that the internet giant has itself been the subject of two different antitrust cases this year.

CNBC reports that on Wednesday, Google lodged a formal antitrust complaint against Microsoft with the European Commission, alleging that the software giant employs unfair licensing terms to “lock in” clients and exert control over the multibillion-dollar cloud computing market. The complaint comes amid growing competition between the two companies in the rapidly expanding cloud sector.

According to Google, Microsoft leverages its dominant Windows Server and Microsoft Office products to make it difficult for its vast client base to use cloud infrastructure offerings other than its own Azure platform. The internet giant claims that restrictions in Microsoft’s cloud licensing terms hinder customers from moving their workloads from Azure to competing cloud services, despite the absence of technical barriers.

Google, which currently ranks third in the global cloud computing market behind Amazon Web Services and Microsoft Azure, cited a 2023 study by CISPE, a trade body for the cloud computing sector. The study found that European businesses and public sector organizations have been compelled to pay Microsoft up to 1 billion euros ($1.1 billion) annually in licensing penalties due to limitations on their ability to switch cloud providers.

The complaint follows a settlement agreement reached in July between CISPE, its members, and Microsoft, which would see the latter make changes to address competition concerns. However, Google, along with Amazon Web Services and Alibaba’s cloud unit AliCloud, chose not to participate in the settlement.

In a statement, Microsoft said it expects the European Commission to dismiss Google’s complaint, noting that it had “settled amicably similar concerns raised by European cloud providers, even after Google hoped they would keep litigating.”

Amit Zavery, Google Cloud’s head of platform, told CNBC that the company believes Microsoft is “100%” in violation of EU antitrust rules. He emphasized Google’s desire for a vibrant and open cloud market that allows customers to choose the best provider for their needs, both commercially and technically.

Google also suggested that Microsoft’s cloud practices may have made businesses more vulnerable to security issues. The company referred to findings from a UK Competition and Markets Authority study, which determined that Microsoft acquired over 60 to 70 percent of all new British businesses in 2021 and 2022.

As Google is pushing its antitrust claim against Microsoft, it is also defending itself in court against antitrust allegations in the United States. Most recently, executives claimed Google is the misunderstood good guy of the advertising market.