Microsoft is exploiting its anti-competitive advantage over the European cloud market, Google says


The big picture: Once upon a time, Google was the dominant force behind the growing cloud computing market. Things are pretty different nowadays, as Alphabet’s internet business is trailing behind market leaders Microsoft and Amazon.

Google is officially accusing Microsoft of anti-competitive behavior in the cloud computing business as the Redmond corporation is striking specific agreements with several cloud vendors in Europe. The deals, Google said, don’t provide clear answers to the broader concerns the company has (and that the European authorities should have too) about actual licensing terms.

Google Cloud’s Vice President Amit Zavery said Microsoft has “a very anti-competitive posture in cloud,” as the company is leveraging its dominant position in the on-premise market as well as with Office 365 and Windows to “tie Azure and the rest of cloud services” together. Microsoft is essentially making an offer that customers can’t refuse, Zavery suggested, so they don’t have a choice about their cloud provider anymore.

Zavery said that when Google talks to “a lot” of its potential customers, they have already become hostage to Microsoft’s bundling practices, its pricing and licensing restrictions, and they aren’t free to choose other cloud providers anymore. Redmond is exploiting its unfair advantage in the cloud business to shut the mouth of smaller European vendors, Google suggested.

Zavery also said that Microsoft is “selectively kind of buying out those ones” who complain about its market practices offering terms they won’t make available to other companies. That definitely is “an unfair advantage to Microsoft and ties the people who complained back to Microsoft anyway,” Zavery said.

European regulators should look at this behavior from a historical point of view, Zavery stated, meaning that EU should consider the anti-competitive behavior Microsoft had been well-known for in the pre-cloud era already. Even if one or two vendors might settle their antitrust case, the broader problem remains.

Zavery said the issue is not merely a spat between Google and Microsoft, as Microsoft is already facing an antitrust complaint from the Cloud Infrastructure Services Providers in Europe (CISPE). CISPE members includes Amazon (AWS) and many companies working in the European cloud business.

“The question is not about Google,” Zavery said, “it’s the cloud.” Which should be an “open, flexible way” to deploy customers’ software and provide companies with more choices so that they can run their software wherever they want in a much easier way.


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