Google files formal EU complaint over Microsoft cloud practices

Google has lodged a complaint with the European Commission accusing Microsoft of anti-competitive practices in the cloud market.

The move follows Microsoft agreeing a deal with European cloud body CISPE regarding an antitrust complaint over its cloud computing licensing practices, with the trade group threatening to take the matter to the EC if a solution wasn’t found.

The final settlement agreement between Microsoft and CISPE did not include AWS or Google Cloud.

Google claimed — in a blog post attributed to head of platform Amit Zavery and Google Cloud EMEA president Tara Brady — that Microsoft was attempting to lock customers into using its Azure cloud platform.

“Microsoft’s licensing terms restrict European customers from moving their current Microsoft workloads to competitors’ clouds – despite there being no technical barriers to doing so – or impose what Microsoft admits is a striking 400% price markup,” the post said.

Google noted in a summary of its complaint to the EC that it shared with ITPro that the settlements agreed with CISPE and its members “do not fix the underlying market-wide licensing issues or solve the continued harm to EU customers”.

Because of that, Google said regulatory intervention is necessary, calling for “simple yet necessary fixes” to solve the issue: allow customers with existing Windows Server licenses to use those in any provider’s cloud at no additional cost; force Microsoft to offer the same prices for Windows Server regardless of cloud provider; and ensure parity in security support and updates for everyone, even if not using Azure.

Microsoft practices are costing Europeans

Google pointed to research originally cited by CISPE that such tactics cost European businesses as much as €1 billion a year, stifle innovation, and cause security risks, pointing to the CrowdStrike debacle.

“As highlighted by the massive security outage two months ago, Microsoft’s lock-in tactics can result in a single point of failure that harms businesses, industries, and governments,” the post added.

Google said it had attempted to engage directly with Microsoft and via a wider industry dialogue, claiming to have “advocated on behalf of European customers and partners who fear retaliation in the form of audits or worse if they speak up.”

As that has failed, Google felt compelled to take further action.

“To give voice to the complaints we hear from customers – and from across the industry – and to seek a resolution that will benefit everyone, we are now taking the next step of filing a formal complaint with the European Commission,” the post said.

Microsoft responds

When approached for comment by ITPro, Microsoft sent a written statement: “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.”

The EC must still decide if it will open a formal investigation into the issue.

In its filing, Google noted that Microsoft previously had been targeted by the EC with an investigation into its bundling of Teams with Office 365, stating that “the products are new, but the strategies are not.”

Google has itself faced a long list of investigations from the EC, and was fined €2.4 billion in 2017 over shopping search practices, €4.3 billion in 2018 for search on Android and €1.49 billion for online advertising tactics.