Microsoft was already facing anticompetitive scrutiny over its handling of its enterprise chat app Teams, but now the company can add its cloud services to that list as Google official files a complaint with the EU over unfair practices regarding Azure.
As Reuters reports in a recent piece from author Philip Blenkinsop, Google has filed a complaint with the European Commission on Wednesday that alleges Microsoft’s deployed anti-competitive practices to lock users into Azure services over those of competitors such as Google Cloud or Amazon’s AWS.
Google Cloud VP Amit Zavery claims that Microsoft made customers “pay a 400% mark-up to keep running Windows Server on rival cloud computing operators.” Conversely, the same markup was absent for anyone who chose to stick with Azure as part of its integrated cloud stack.
Zavery further claims that customers who were willing to swallow the disproportionate markup were additionally saddled with second-hand support that included delayed and limited security updates.
As evidence, Zavery points to a 2023 report from CISPE, a ‘code of conduct’ cloud services organization that found European business customers and organizations were being billed up to one billion euros just on Microsoft licensing penalties alone.
Unfortunately for Zavery, Microsoft just struck a 20-million euro deal to squash a similar cloud services-based antitrust complaint investigation initiated by the same CISPE group.
Back in July of 2024, Microsoft sought to avoid a full-blown antitrust charge from the EU initiated by complaints from the CISPE that took issue with the company’s cloud computing licensing structures.
After working with CISPE and its European members for more than a year, I am pleased that we have not only resolved their concerns of the past, but also worked together to define a path forward that brings even more competition to the cloud computing market in Europe and beyond.
Microsoft President Brad Smith
In addition to the pay out, Microsoft is also charged with developing a product that allows CISPE members to run its software on their own platforms for equivalent pricing. Microsoft will also be forced to reimburse CISPE members for lost revenue over the past two years due to its previously unfair licensing costs. While actual dollars and cents were not revealed following the deal involving Microsoft and the CISPE, noted CISPE members include Netcetera, Seeweb, Dada, Host Europe Group, Amazon, and more.
With that being said, Microsoft seems pretty confident that its new deal with the EU will shield the company from Google’s latest charge.
Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission
Microsoft spokesperson
While nothing is set in stone, and Microsoft’s new EU carve out against its Azure licensing practices send Google up a steep hill, it should be noted the exemptions the EU allowed seemed extremely specific and Google is not a member of the CISPE. Google believes the EU should act now before the market further consolidates and gets constrained.
Microsoft trails Amazon’s AWS cloud service in most markets but with Microsoft already holding a 70% market share with European businesses through its various Windows Servera and other products, it could be able to lock out a third-place option like Google Cloud if unchecked or exempted by EU regulators.
