Google has filed an antitrust complaint with the European Commission (EC) against Microsoft, accusing the company of using anti-competitive practices in its Azure cloud services.
The complaint focuses on Microsoft’s cloud licensing terms, which Google claims make it financially difficult for companies to switch from Azure to other cloud platforms, such as Google Cloud or Amazon’s AWS. According to Google, these licensing restrictions cost European businesses over €1 billion annually and stifle competition by locking customers into Microsoft’s services.
2019 Licensing Changes
The root of the issue stems from a 2019 licensing change introduced by Microsoft. Google argues that these new terms have made it significantly more expensive for customers to run Windows Server software on non-Microsoft clouds. As a result, organizations that want to move their workloads to other platforms face steep financial penalties.
Google’s complaint points out that these practices have especially harmed European companies and governments by raising costs and reducing their ability to choose alternative cloud providers.
Previous Settlement Excluded Google
Google’s complaint to the EC comes after a similar antitrust case was filed against Microsoft by CISPE (Cloud Infrastructure Service Providers in Europe), a trade body representing European cloud companies. CISPE filed its complaint in 2022, also alleging anti-competitive practices related to Microsoft’s Azure licensing terms.
In July 2023, Microsoft settled that complaint with CISPE for $22 million, agreeing to make Windows Server more accessible and affordable for CISPE members. However, Google, as a major competitor, was not part of that settlement, leading the company to take its own legal action.
A European Commission spokesperson confirmed that Google’s complaint had been received and would be assessed according to standard procedures. Google claims that Microsoft’s tactics are part of a broader strategy to maintain dominance in the cloud market by imposing unfair licensing costs. Specifically, Google highlighted that customers using Windows Server on other cloud platforms could end up paying up to five times more than they would on Azure.
In its filing, Google cited research from Professor Frédéric Jenny, chair of the OECD Competition Committee. His study claims that European businesses and government organizations were forced to pay an additional €1 billion in 2022 due to Microsoft’s licensing policies, which effectively discouraged them from choosing non-Microsoft cloud providers.
Microsoft, on the other hand, maintains that the EC will dismiss Google’s complaint. A Microsoft spokesperson pointed to the earlier settlement with CISPE as evidence that the company had already addressed similar concerns from European cloud providers. The spokesperson also referenced a Bloomberg report suggesting that Google had unsuccessfully tried to offer a $500 million alternative deal to CISPE in order to keep the complaint against Microsoft alive.
Google Calls for Open Competition in Cloud Market
Amit Zavery, Head of Platform at Google Cloud, emphasized the need for more open competition in the cloud market. In a statement, Zavery argued that Microsoft’s licensing restrictions hurt innovation, limit customer choice, and negatively impact cybersecurity. He called for the removal of these restrictions, allowing customers to choose the cloud provider that best meets their commercial and technical needs.
Microsoft is already facing antitrust scrutiny from the European Commission in another ongoing case. In June, the EC accused Microsoft of unfairly bundling its Teams software with other productivity apps, further adding to the company’s legal challenges in Europe.
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