Google Calls on UK Regulator to Tackle Microsoft’s Cloud Dominance
Google’s Request to UK Regulator
Google has urged Britain’s antitrust regulator to take action against Microsoft, alleging that its business practices have put competitors at a significant disadvantage. The company claims that Microsoft’s licensing practices unfairly discourage customers from using competitor services and leave them with no economically reasonable alternative but to use Azure as their cloud services provider.
Mounting Regulatory Scrutiny
Microsoft and Amazon have been facing increased scrutiny globally over their dominance in the cloud computing industry. Regulators in Britain, the European Union, and the U.S. are investigating their market power. The CMA launched an investigation into Britain’s cloud computing industry in response to a referral from media regulator Ofcom, which highlighted Amazon and Microsoft’s dominance of the market.
Market Share Dynamics
According to Ofcom, Amazon Web Services (AWS) and Microsoft’s Azure held a combined 70-80% share of Britain’s public cloud infrastructure services market in 2022, while Google’s cloud division had around 5-10%. Google emphasized that Microsoft’s licensing restrictions were the only significant barrier to competition in Britain’s cloud computing market.
Google’s Allegations Against Microsoft
In its letter to the CMA, Google highlighted that Microsoft’s licensing practices unfairly discouraged customers from using competitor services, even if they preferred the prices, quality, security, innovations, and features of rivals. The company stated that such practices directly harmed customers and called for action to address the issue.
Microsoft’s Response and Google’s Recommendations
Microsoft updated its licensing rules to address concerns, but Google and other rivals were not satisfied with the changes. Google made six recommendations to the CMA, including forcing Microsoft to improve interoperability for customers using Azure alongside other cloud services and banning it from withholding security updates from those that switch.
Google’s Commitment to Competition
Amit Zavery, Google Cloud Vice President, criticized Microsoft’s practices and emphasized Google’s commitment to a multi-cloud approach, where customers could easily move between providers depending on their needs. He highlighted the importance of addressing licensing restrictions to prevent a reduction in cloud providers and hinder innovation and investments in the industry.
Addressing Anticompetitive Risks
Google raised concerns about Microsoft’s decision to update the terms for when customers wanted to use their Windows or other software licenses in the cloud, resulting in higher costs if they used Google or AWS instead of Microsoft’s Azure. Zavery noted that AWS consumers were not facing the same restrictions, emphasizing the need to address the issue to foster healthy competition in the cloud market.
Overall, Google’s efforts to address Microsoft’s alleged anticompetitive practices underscore the ongoing battle for market share and fair competition in the cloud computing industry.
