Google Calls for CMA Investigation into Microsoft’s Alleged Abuse of Cloud Market Licensing Restrictions
Google has requested the UK’s Competition and Markets Authority (CMA) to conduct a thorough investigation into Microsoft, accusing the software giant of exploiting licensing restrictions to solidify its position in the UK cloud market. According to reports, Google claims that Microsoft is manipulating the limitations on its software products to prevent enterprise customers from migrating from Azure’s cloud to competitors’ platforms.
The CMA is already in the process of investigating Microsoft Azure, Google Cloud, and Amazon’s AWS for potential anti-competitive practices occurring within the UK cloud market. In a letter submitted to the CMA, Google Cloud specifically alleges that Microsoft raises the prices whenever customers consider deploying alternative software in Azure’s cloud. This strategy, according to Google, leaves UK customers with no reasonable choice but to opt for Azure, even if they prefer the offerings of rival providers in terms of pricing, quality, security, innovation, and features.
These practices, Google argues, create a direct obstacle to competition in the UK cloud market, which is predominantly dominated by hyperscale cloud providers. Together, Microsoft Azure, Google Cloud, and AWS account for an estimated 70-80% of the market share, with Google Cloud representing only 5-10% of this.
Amidst these claims, Amit Zavery, Vice President of Google Cloud, emphasized the company’s commitment to enabling multi-cloud solutions for its customers. Zavery stated that many of their software and cloud services are interoperable and can function on AWS or Azure as well. He expressed concerns that innovation within the industry would suffer without such flexibility. Notably, Google previously made similar allegations against Microsoft in a letter to US regulators earlier this year.
Nicky Stewart, former Commercial Director of UK Cloud, expressed the views of various cloud hosting providers, noting that the issue is a concern shared by many others in the industry, not just competing hyperscalers. Stewart highlighted that Microsoft has already faced similar cases brought by European Union-based cloud providers and had offered settlements on comparable grounds.
In response to Google’s accusations, Microsoft staunchly defended its practices in the cloud market and argued that recent data indicates healthy competition between hyperscale cloud providers. A Microsoft spokesperson mentioned that the company had recently updated its licensing terms to address concerns about competition and actively collaborated with independent cloud providers on interoperability and other related issues.
The CMA has been investigating the cloud market since a market study by media regulator Ofcom revealed widespread anti-competitive practices. While Google Cloud has been recognized as a strong supporter of open-source technologies, smaller cloud providers have accused it of aggressive pricing strategies and imposing similar egress fees to Microsoft.
The cloud market is eagerly monitoring the development of the CMA’s investigation into Microsoft, as its outcome will undoubtedly have a substantial impact on the competitive dynamics of the UK cloud market. As the dominant players continue to vie for market share, the CMA’s decision will significantly shape the future trajectory of the industry and the options available to enterprise customers in the cloud space.
