Google goes to the CMA over Microsoft cloud dominance concerns

One of Microsoft’s fiercest competitors and its recent pain-in-the-neck regulatory body could be teaming up soon to pose an antitrust obstacle to the company’s cloud market in the UK.

In a letter seem by Reuters, Google has expressed its concerns with Microsoft’s cloud licensing practices to the Competition and Markets Authority (CMA). According to the letter, Google would like the CMA to apply some sort of antitrust action against Microsoft in what it believes are unfair licensing practices that “discourage customers from using competitor services.”

Google’s concerns

“With Microsoft’s licensing restrictions in particular, UK customers are left with no economically reasonable alternative but to use Azure as their cloud services provider, even if they prefer the prices, quality, security, innovations, and features of rivals.”

Google

In October of this year, the CMA was prompted by media regulator Ofcom to independently opened an investigation into the UK’s cloud computing sector spurred by concerns of Amazon and Microsoft’s market dominance.

With Azure and Amazon Web Services (AWS) accounting for close to 80% of the UKs public cloud infrastructure, Ofcom’s concerns seemed well intention and forward leaning. Google sits with roughly 10% of its own stake in the regions cloud services market, and based on its current position, has reason for concern about being locked out of the market in the future.

Why Microsoft specifically?

However, Google’s complaint is specific to Microsoft despite Azure playing second fiddle to Amazon’s AWS cloud in most markets. While both Microsoft and Amazon offer varying degrees of interoperability with Google’s cloud services, the former has a licensing practice that worries the third place cloud platform.

“There are some issues, in terms of cloud interoperability, but we can fix that. That’s a discussion between providers, which is much understood, and customers are forcing that conversation.

The problem we run into with Microsoft is that there’s no technical issue, but you have licensing restrictions which means we are now being prevented from competing.”

Google Cloud Vice President Amit Zavery

Antitrust solutions

In its letter to the CMA, Google offered several recommendations it sees as solutions to Microsoft’s threatening licensing practices as of late that include forcing security updates to customers who switch platforms as well as improved interoperability for Azure customers alongside alternatives.

Microsoft responded to the news with a statement to Reuters from a spokesperson that states, “As the latest independent data shows, competition between cloud hyperscalers remains healthy. In the second quarter of 2023 Microsoft and Google made equally small gains on AWS, which continues to remain the global market leader by a significant margin.”

Since the initial CMA probe back in October, Microsoft stands by its earlier efforts to include over 100 worldwide cloud providers in its efforts to address concerns over its cloud business in relation to the market.

As of now, the CMA has yet to weigh in on the matter officially with a comment.