Google accuses Microsoft of anti-competitive cloud practices: Report

Alphabet’s Google Cloud has accused Microsoft of anti-competitive cloud computing practices urging European Union (EU) regulators to crack down on its rival's deals with smaller companies, according to a report published in Reuters on Thursday. 

"Microsoft definitely has a very anti-competitive posture in cloud," Google Cloud president Amit Zavery said in an interview with the news agency. "They are leveraging a lot of their dominance in the on-premise business as well as Office 365 and Windows to tie Azure and the rest of cloud services and make it hard for customers to have a choice." 

In response to the recent allegations, Microsoft referred to a blogpost in May last year where its president Brad Smith said it 'has a healthy number two position when it comes to cloud services, with just over 20% market share of global cloud services revenues'.  

Notably, the news comes one day after Microsoft said has offered to change its cloud computing practices to settle antitrust complaints filed by smaller rivals, a person with direct knowledge of the matter told news website Bloomberg on March 29. 

The response came as French cloud computing services provider OVHcloud, Italian cloud service provider Aruba, and a Danish association of cloud service providers had complained to EU about Microsoft's cloud practices and licensing deals. The EU Commission, had fined Microsoft more than 1.6 billion euros (S$2.3 billion) in the past decade, will monitor the settlement, the person said.  

Zavery however argued that individual deals struck with several smaller European cloud vendors only benefit Microsoft. “They're selectively kind of buying out those ones who complain and not make those terms available to everyone. So that definitely makes it an unfair advantage to Microsoft and ties the people who complained back to Microsoft anyway,” he told Reuters. 

"Whatever they're offering, there should be terms across for everybody, not just for one or two they've chosen and pick, and that shows you that they have so much market power they can kind of go and do those things individually,” he told the news agency adding that “my point to the regulators would be that they should look at this holistically, even though one or two vendors might settle doesn't solve the broader problem. And that's the problem we need to really resolve, not individual vendors' problems”. 

Meanwhile, Microsoft faces another EU antitrust complaint from CISPE, a non-profit trade association for infrastructure as a service (IaaS) cloud providers in Europe, whose members include Amazon. The trade group has rejected the Microsoft's changes. 

There is intense rivalry between the two U.S. tech giants in the multi-billion-dollar cloud computing business, where Google trails market leader Amazon and Microsoft. In the fourth quarter of 2022, Microsoft's Azure claims a global market share of around 23%, according to a report published by market research firm Statista in February 2023, while Amazon's AWS still leading around the 32% market share, followed by Google Cloud with 10% market share. Together, these three cloud vendors account for 65% of total spend in the fourth quarter of 2022.  

Meanwhile on Wednesday, in India Google has won partial relief in the National Company Law Appellate Tribunal (NCLAT) ruling in the Competition Commission of India (CCI) case. While the company has been asked to pay Rs 1000-plus fine, the tribunal has set aside four of the 10 antitrust conditions that the CCI had imposed on the company in October last year.