Google has accused Microsoft of using its dominant position in enterprise software to push customers toward its Azure cloud services and stifle competition in the cloud market. In a letter to the Federal Trade Commission (FTC) on Wednesday, Google alleged that Microsoft imposes restrictive licensing terms on its Windows Server and Microsoft Office products that make it difficult for customers to use other cloud providers, such as Google Cloud or Amazon Web Services (AWS).
Google also claimed that Microsoft's influence poses cybersecurity risks, citing recent cyberattacks involving Microsoft products, such as the SolarWinds breach. Google argued that by locking customers into its cloud ecosystem, Microsoft prevents them from diversifying their vendors and accessing more secure and innovative solutions.
Google's complaint comes amid growing scrutiny of the cloud industry by regulators around the world. In March, the FTC issued a request for comment on potential anticompetitive practices in the cloud sector, seeking input from industry stakeholders on issues such as security, interoperability, data portability and pricing. The FTC did not comment on Google's letter.
Microsoft is the second-largest cloud provider by market share, behind AWS and ahead of Google. According to research firm Canalys, Microsoft had a 20% share of the global cloud infrastructure market in the first quarter of 2023, compared to AWS's 32% and Google's 7%. Microsoft has been growing its cloud business rapidly, and the business is now the company's biggest.
Europe Pushing Against Microsoft's Cloud Practices
Google has been a vocal critic of Microsoft's cloud practices, including how the company's concessions for its cloud business in Europe. Microsoft Cloud made changes to how it works in Europe by overhauling the Microsoft Cloud Solution Provider partner program. The company announced its intentions in May last year before rolling out changes in October. Concessions came in the wake of a European Commission investigation.
In May, the European Commission opened an informal investigation into Microsoft's cloud practices across Office and cloud. The probe comes amid rising concerns that the US tech giant is leveraging its market power to edge out rivals. The European Commission (EC) has opened an informal investigation into Microsoft's Azure cloud business. The EC is looking into whether Microsoft is abusing its dominant market position in the cloud computing market to stifle competition.
The EC's investigation is focused on whether Microsoft is using its dominant position in the operating system market to give its Azure cloud business an unfair advantage and whether Microsoft is using its relationships with large customers to lock them into its Azure cloud platform.