Alphabet Inc.’s Google filed an antitrust lawsuit against rival Microsoft Corp. in Europe on Wednesday, claiming the software giant leverages Windows software to lock customers into its Azure cloud services.
The complaint, sent to the European Commission in Brussels, accuses Microsoft of engaging in cloud-computing practices that discourage users from easily switching to other services. Microsoft customers who move Windows to Azure “can do so essentially for nothing,” but those who choose a cloud competitor “must pay a 400 percent mark-up to buy new Windows server licenses,” Google alleged.
A change to Microsoft’s licensing agreement in 2019 limits choices and raises prices for Windows Server customers that want to use a competing cloud service, Google said in the antitrust filing.
Google also charged Microsoft with discriminatory practices; price mark-ups, it said, only apply to Azure’s main rivals, Amazon.com Inc.’s AWS, Google Cloud Platform and Alibaba Cloud.
Microsoft said it has “settled amicably similar concerns raised by European cloud providers, even after Google hoped they would keep litigating. Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission.”
The lawsuit is likely to take years to resolve, legal experts said, and it may not significantly impact the European cloud market.
“Recently we’ve seen high profile complaints like this fall through — notably CISPE’s after Microsoft offered a sweetheart deal to its members, leaving the rest of Europe’s cloud market behind,” Civo CEO Mark Boost said in an email. “This one offers more hope. Google is unlikely to accept any deal from Microsoft, and it’s possible that AWS — the world’s largest provider — may join the complaint after being frozen out of the CISPE deal.”
Google filed about two months after Microsoft won a multimillion-dollar agreement with rival cloud providers to avert a formal investigation by the EU over its market leadership. Microsoft President Brad Smith, the company’s point person on competitive issues, said the July deal resolved previous concerns and brought a more level playing field to the region.
Google’s suit is but the latest competitive conflagration for Microsoft in Europe, where Google and Apple Inc. — ironically — have been heavily fined over the years. In June, the European Commission ruled Microsoft abused its market share by tying Teams to Microsoft 365 and Office 365 since 2019.
Most interestingly, the action of one Big Tech company taking on another with charges of anticompetitive business behavior adds a new wrinkle to a five-year-plus push by the U.S. federal government to regulate and rule the largest tech companies in the world.
The Justice Department has undertaken two separate antitrust cases against Google, and is reportedly eyeing Apple next. Meanwhile, the Federal Trade Commission is taking on Amazon. Both agencies are considering legal action against AI powerhouses Microsoft, OpenAI and NVIDIA Corp.
