Google Calls for UK Antitrust Action Against Microsoft in Cloud Computing

Quiver Quantitative – Google (NASDAQ:) (GOOG) has recently urged the UK’s Competition and Markets Authority (CMA) to investigate Microsoft (NASDAQ:)’s cloud computing practices, alleging anti-competitive behavior that stifles the market. This request emerges amid broader scrutiny of the cloud computing industry dominated by Microsoft (MSFT) and Amazon (NASDAQ:) in various global regions, including the UK, European Union, and the United States. Google’s push for regulatory intervention was detailed in a letter to the CMA, which Reuters obtained.

The letter highlights Google’s concerns about Microsoft’s licensing practices, which they claim unfairly limit competition and customer choice in the UK’s cloud computing sector. According to Google, Microsoft’s practices effectively compel customers to rely on Azure, Microsoft’s cloud service, even if they prefer the offerings of competitors like Amazon Web Services (AWS) or Google Cloud. This situation, Google argues, directly harms customers and represents a significant obstacle to market competition. In response to these allegations, the CMA has remained silent, choosing not to comment publicly.

While Microsoft has attempted to address these concerns by updating its licensing rules to promote competition, rivals, including Google, have found these changes insufficient. A Microsoft spokesperson defended the company’s efforts, noting that over 100 independent cloud providers have embraced their revised policies and that competition in the cloud hyperscaler market remains robust. Despite these claims, Google Cloud Vice President Amit Zavery criticizes Microsoft’s approach, advocating for a multi-cloud strategy that allows customers greater freedom to move between different cloud services according to their needs.

The core of the dispute centers around Microsoft’s policy updates related to using their software licenses, like Windows, in the cloud. These updates have seemingly made it more expensive for customers to use Google (GOOGL) or AWS instead of Azure. Google argues that while AWS, the market leader, doesn’t impose similar constraints, Microsoft’s licensing restrictions prevent fair competition. Google’s recommendations to the CMA include enforcing Microsoft to enhance interoperability for customers using Azure alongside other services and prohibiting Microsoft from withholding security updates from clients switching to other providers.

This article was originally published on Quiver Quantitative