Google has formally requested the UK’s Competition and Markets Authority (CMA) to intervene against Microsoft, accusing the tech giant of engaging in business practices that put competitors at a significant disadvantage.
This move comes amid increasing global scrutiny of Microsoft and Amazon’s dominance in the cloud computing sector. Regulatory bodies in the UK, European Union, and the United States are already investigating their market power.
In October, the CMA initiated an investigation into Britain’s cloud computing industry, prompted by a referral from media regulator Ofcom, which raised concerns about the market dominance of Amazon and Microsoft. According to Ofcom, Amazon Web Services (AWS) and Microsoft’s Azure held a combined 70-80% share of the UK’s public cloud infrastructure services market in 2022, while Google’s cloud division trailed as the closest competitor with a share of around 5-10%.
In its letter to the CMA, Google alleges that Microsoft’s licensing practices create an unfair advantage by discouraging customers from using rival services alongside Azure. Google claims that these practices leave customers with no economically reasonable alternative but to opt for Azure, even if they prefer the offerings of other providers in terms of pricing, quality, security, innovation, and features.
According to Google, Microsoft’s licensing restrictions are the primary barrier to competition in the UK’s cloud computing market, directly harming customers. Microsoft updated its licensing rules last year to address concerns and enhance competition, but Google contends that the changes did not address the core issues.
Responding to Google’s claims, a Microsoft spokesperson stated that the company had collaborated with independent cloud providers to address concerns and promote competition. Microsoft emphasized the healthy competition between cloud hyperscalers, citing data from the second quarter of 2023 that showed Microsoft and Google gaining market share on AWS.
Google Cloud Vice President Amit Zavery criticized Microsoft’s practices, highlighting Google’s commitment to a multi-cloud approach that allows customers to switch between providers easily. He expressed concerns that failure to address these issues could lead to fewer cloud providers, hindering innovation and reducing investments.
Google proposed six recommendations to the CMA, including measures to improve interoperability for customers using Azure alongside other cloud computing services and preventing Microsoft from withholding security updates for those transitioning to different providers. The CMA has not provided any comments on the matter at this time.
