Alphabet Inc.’s GOOG GOOGL Google has reportedly urged the U.K.’s antitrust regulator, the Competition and Markets Authority or CMA, to investigate Microsoft Corporation MSFT over alleged unfair business practices.
What Happened: Following concerns raised by Ofcom, the media regulator, about Microsoft and Amazon Inc. AMZN dominating the cloud computing industry, the CMA initiated an investigation in October.
In a letter to the CMA, Google accused Microsoft of crafting licensing practices that discourage consumers from using other services, even as secondary providers to its Azure platform, reported Reuters.
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Google argued that Microsoft’s restrictions leave customers with no economically viable alternative but to use Azure as their primary cloud services provider. It also alleged that such practices are a significant barrier to competition in the U.K.’s cloud computing industry.
Google’s vice president of Cloud, Amit Zavery, also pointed out Google’s commitment to a multi-cloud approach and customer flexibility.
When he was asked why Amazon, which has a larger pie of the cloud market, doesn’t pose similar risks, Zavery said, “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.”
The report noted that Google has presented six recommendations to the CMA, including compelling Microsoft to enhance interoperability for Azure customers and prohibiting it from withholding security updates from those who switch services.
A Microsoft spokesperson responded to the report, saying, “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.”
Why It Matters: The cloud computing industry has been a crucial sector for tech giants. However, not all companies have achieved the same success level, with Google’s shares experiencing a pullback due to softer third-quarter cloud revenue.
Meanwhile, earlier this year, during the ongoing antitrust trial, Microsoft CEO Satya Nadella gave testimony against Google, saying that Apple’s choice of a default search engine holds significant influence. The search and advertising giant reportedly paid $26.3 billion to multiple partners, including Apple, to maintain its default status on browsers and mobile devices.
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