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Google Urges UK Regulators to Take Antitrust Measures Against Microsoft in Cloud Dispute

Google has accused Microsoft of anti-competitive practices in the UK cloud market, claiming Microsoft's licensing practices force customers into using Microsoft's Azure cloud services

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has asserted to the UK's Competition and Markets Authority (CMA) that 's current cloud licensing rules put competitors at a significant disadvantage. According to the allegation, these practices force British customers into using Microsoft's Azure cloud services instead of exploring alternatives that might offer better pricing or features. This situation, according to Google, represents the main barrier to competition within the UK's .

Investigation Into Cloud Dominance

Market analyses indicate that Amazon Web Services (AWS) and Microsoft's Azure hold a commanding presence in the UK, possessing between a 70-80% share of the public services. This dominance prompted an investigation by the CMA that began in October, following a referral from media regulator Ofcom. Ofcom had already underscored the substantial market influence wielded by AWS and Azure. Google, on the other hand, only accounts for an estimated 5-10% of this market, positioning itself as their nearest competitor.

Google's recent submission highlights concerns over Microsoft's licensing terms, suggesting that they effectively marginalize competitor services and lock customers into using Azure. Even with updates to licensing rules by Microsoft, aimed at addressing competitive worries, rivals argue that the changes remain insufficient.

Interoperability and Competition Concerns

Vice President Amit Zavery emphasized the need for a multilateral cloud ecosystem where customers freely move between providers. He accused Microsoft of not only technical barriers but also licensing restrictions that limit competition. Contrary to Microsoft, Google's services and software are designed to operate on AWS or Azure, allowing customers more flexibility.

The complaint comes as a response to Microsoft's policy on the use of Windows and other software licenses in the cloud. Customers experience increased costs when opting for cloud platforms like Google or AWS instead of Azure. While AWS's larger cloud does not raise similar antitrust concerns, says Zavery, this is due to AWS customers not encountering the same restrictive licensing terms.

Google has acknowledged the necessity for improved interoperability, which could benefit consumers who wish to use Azure in conjunction with other cloud services. The company suggested that the CMA should consider compelling Microsoft to facilitate such interoperability and also prohibit the practice of withholding security updates from customers who switch services.

In response to these allegations, a Microsoft spokesperson noted that Microsoft has collaborated with various independent cloud providers to overcome concerns and foster opportunity, with over 100 providers worldwide engaging with their revised licensing terms. The spokesperson further emphasized that the competition in the cloud sector continues to be vigorous and beneficial for all parties involved.

The CMA, at the time of reporting, has not yet issued a public comment on Google's recommendations or the allegations raised. The unfolding situation reflects ongoing global scrutiny concerning the competitive dynamics within the cloud computing industry, which remains a critical element of the modern digital infrastructure. Microsoft has already had a battle with the CMA this year over its acquisition of Activision Blizzard.

Ongoing Cloud Investigation

In October, the CMA and telecom regulator Ofcom have announced a new investigation into the practices of major cloud service providers, Microsoft and . Ofcom's research has revealed some challenges that customers face when they switch or use multiple cloud suppliers. These challenges include high costs of moving data out of cloud facilities, incentives to stick with one cloud provider, and technical barriers in changing between cloud providers. Ofcom also expressed its worries about the software licensing practices of cloud providers, especially Microsoft.

Ofcom initially opened its investigation last September, also looking at . It seems following its year-long probe, the watchdog sees  and Microsoft as risks and has not decided to move forward with any regulatory investigation against Google cloud. 

SourceReuters
Luke Jones
Luke Jones
Luke has been writing about all things tech for more than five years. He is following Microsoft closely to bring you the latest news about Windows, Office, Azure, Skype, HoloLens and all the rest of their products.

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