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Business News/ Companies / News/  Google pushes for antitrust action against Microsoft in UK cloud market
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Google pushes for antitrust action against Microsoft in UK cloud market

Microsoft and Amazon have faced mounting scrutiny around the world, over their dominance of the cloud computing industry, with regulators in Britain, the European Union, and the U.S. probing their market power.

The Google Cloud data center ahead of its ceremonial opening in Hanau, Germany, on Friday, Oct. 6, 2023. Microsoft Corp., Alphabet Inc.'s Google and ChatGPT maker OpenAI use cloud computing that relies on thousands of chips inside servers in massive data centers across the globe to train AI algorithms called models, analyzing data to help them learn to perform tasks. (Photographer: Alex Kraus/Bloomberg)Premium
The Google Cloud data center ahead of its ceremonial opening in Hanau, Germany, on Friday, Oct. 6, 2023. Microsoft Corp., Alphabet Inc.'s Google and ChatGPT maker OpenAI use cloud computing that relies on thousands of chips inside servers in massive data centers across the globe to train AI algorithms called models, analyzing data to help them learn to perform tasks. (Photographer: Alex Kraus/Bloomberg)

Google has called on Britain’s antitrust regulator to take action against Microsoft, claiming its business practices had left rivals at a significant disadvantage, according to a letter seen by Reuters.

Microsoft and Amazon have faced mounting scrutiny around the world, over their dominance of the cloud computing industry, with regulators in Britain, the European Union, and the U.S. probing their market power.

The CMA (Competition and Markets Authority) launched an investigation into Britain’s cloud computing industry in October, following a referral from media regulator Ofcom which highlighted Amazon and Microsoft’s dominance of the market.

Also Read: Google's set to delete ‘Inactive Accounts’! Here's how to protect it

In 2022, Amazon Web Services (AWS) and Microsoft's Azure had a combined 70-80% share of Britain's public cloud infrastructure services market, Ofcom said. Google’s cloud division was their closest competitor, at around 5-10%.

In a letter submitted to the CMA, Google said Microsoft’s licensing practices unfairly discouraged customers from using competitor services, even as a secondary provider alongside Azure.

“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 said in its letter to the CMA.

Such practices directly harmed customers, and were the only significant barrier to competition in Britain’s cloud computing market, the company said.

Also Read: Microsoft unlikely to get a seat on OpenAI board, experts say Satya Nadella's company won't ‘sit passively’

Microsoft last year updated its licensing rules to address such concerns and promote competition, though the changes did not satisfy rivals.

A Microsoft spokesperson said the company had worked with independent cloud providers to address concerns and provide opportunity and that more than 100 worldwide had taken advantage of the changes.

"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," the Microsoft spokesperson said.

Speaking to Reuters, Google Cloud Vice President Amit Zavery criticised Microsoft’s practices, and said his company was committed to a multi-cloud approach, in which customers could easily move between providers depending on their needs.

"A lot of our software and cloud services interoperate, and can run on AWS or on Azure as well, so you're not restricted," he said. "If you don't fix this, eventually you will have fewer cloud providers, and then innovation will not really happen, and investments will start shrinking."

At issue was Microsoft's decision to update the terms for when customers wanted to use their Windows or other software licenses in the cloud, effectively resulting in higher costs if they used Google or AWS instead of Microsoft's Azure.

Also Read: ‘Cloud, AI can unlock 1.6 trillion for small biz’

Asked why Amazon, which boasts a larger share of the cloud market than Microsoft, did not pose a similarly anticompetitive risk, Zavery said AWS consumers were not facing the same restrictions.

“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," he 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."  

Google made six recommendations to the CMA, including forcing Microsoft to improve interoperability for customers using Azure and alongside other cloud services, and banning it from withholding security updates from those that switch.

The CMA did not immediately respond to a request for comment.

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This story has been published from a wire agency feed without modifications to the text.

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Published: 01 Dec 2023, 07:28 AM IST
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