Google Cloud files EU complaint against Microsoft

• Google Cloud has lodged a competition complaint against Microsoft with the European Commission, alleging that Microsoft’s licensing terms “restrict” customers from switching to rival cloud providers.
• Google Cloud’s complaint follows a 2022 settlement between Microsoft and CISPE but argues that Microsoft failed to reform its practices, opting for selective deals instead.

OUR TAKE
Google Cloud’s complaint against Microsoft to the European Commission highlights concerns over anti-competitive practices in the cloud industry. Google accuses Microsoft of using restrictive licensing tactics that force European businesses to use its Azure platform, costing them over €1 billion annually. The complaint aims to address these issues and push for fairer competition in the European cloud market.
-Tacy Ding, BTW reporter

What happened

Google Cloud has intensified its competition dispute with Microsoft by filing a complaint with the European Commission, accusing Microsoft of using unfair licensing tactics that harm European companies and governments. Amit Zavery, Head of Platform at Google Cloud, and Tara Brady, President for Google Cloud EMEA, outlined the issues in a blog post, claiming Microsoft’s practices cost European businesses over €1 billion annually and stifle competition.

At the heart of the complaint are Microsoft’s licensing policies for enterprise cloud products, particularly Windows Server. Google Cloud alleges Microsoft restricts customers from running Windows Server on third-party hardware, effectively forcing them to use Microsoft’s Azure cloud platform. This, Google Cloud argues, has led to hidden costs and diverted funds from European businesses that could have otherwise been used for growth and digital transformation. Additionally, the complaint highlights concerns over wasted tax funds, competitive restrictions, and what Google describes as Microsoft’s “inadequate” security culture. See also: T-Mobile named official 5G partner for US golf.

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Why it’s important

The move comes after a 2022 settlement between Microsoft and the Cloud Infrastructure Service Providers in Europe (CISPE), which had raised similar concerns. Google Cloud, however, argues that Microsoft failed to reform its practices, instead making selective deals with a few companies rather than addressing the broader issues. By filing the complaint, Google Cloud aims to give a platform to customer concerns and seek fairer competition in the European cloud market.

The European Commission is now tasked with conducting an initial assessment to determine if a formal investigation is needed. If the case proceeds, an investigation could take months or even years, depending on its complexity and Microsoft’s response. See also: CIVO-USA.

Microsoft has downplayed the complaint, with a spokesperson stating that the company had already settled similar issues with European cloud providers and expressing confidence that Google’s efforts would not succeed with the European Commission. See also: Alejandro Estua.