Google files EU antitrust complaint accusing Microsoft of stifling cloud competition

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files EU antitrust complaint accusing

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of stifling cloud competition

Jakub Porzycki | Nurphoto | Getty Images

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filed an antitrust complaint with the ********* Commission Wednesday accusing

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of using unfair licensing contracts to stifle competition in the multibillion-dollar cloud computing industry.

At the heart of

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’s complaint is the allegation that

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uses unfair licensing terms to “lock in” clients and exert control over the cloud market.

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alleges that

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, through its dominant Windows Server and

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Office products, can make it difficult for its massive roster of clients to use anything but its Azure cloud infrastructure offering.

The internet giant said in its complaint that restrictions contained in

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’s cloud licensing terms makes it ******* for customers to move their workloads from

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’s Azure cloud technology to competitors’ clouds, despite there being no technical barriers to doing so.

********* businesses and public sector organizations have been forced to pay the firm up to 1 billion euros ($1.1 billion) a year in licensing penalties due to restrictions on customers’ ability to switch from one cloud provider to another,

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said, citing a 2023 study by CISPE, a trade body for the cloud computing sector.

In a summary of the complaint,

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— which ranks third globally in the cloud computing market behind market leaders

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Web Services and

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Azure, respectively — said that

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“harms cybersecurity and undermines innovation.”

According to

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, if a company runs

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’s Office suite of productivity tools and other applications on

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Cloud Platform or other competing clouds, they are effectively required to pay a “tax” in the form of punchy licensing fees to

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.

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said that

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undermined competition in cloud, and referred to findings of a U.K. Competition and Markets Authority study which determined

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acquired over 60% to 70% of all new British businesses in 2021 and 2022.

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also suggested that

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’s cloud practices have potentially made businesses more prone to security issues.

In an interview with CNBC’s Arjun Kharpal Wednesday, Amit Zavery,

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Cloud’s head of platform, said

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believes

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is “100%” in violation of EU antitrust rules.

“We would like the cloud market to remain and become very vibrant and open for all the providers including ********* vendors, vendors like us, AWS and others,” Zavery said.

“Today the restrictions does not allow choice for customers,” Zavery said. “Today the restrictions does not allow choice for customers,” he said, adding that

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included restrictions once it realized the massive commercial potential of the technology.

“So, we would want those restrictions to be removed and allow customers to have and choose whatever cloud provider they think is best for them commercially and technically,” he added.

Zavery told CNBC that if

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makes changes to its cloud licensing terms as a result of its complaint,

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and cloud customers more broadly would be “very happy.”

The antitrust complaint from

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arrives after a slew of cloud companies in July agreed a settlement with

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which would see the firm make changes to address competition concerns.

CISPE said at the time that

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would work with its members to release an enhanced version of Azure Stack HCI, a cloud infrastructure product, to offer the same features that

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customers using its Azure product currently benefit from.

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, which is not a CISPE member, said it disagreed with the settlement and chose not to participate in the agreement.

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Web Services, which is a CISPE member, and Alibaba’s cloud unit AliCloud, also chose not to become part of the settlement.

For its part,

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has denied that its cloud practices harm competition. In response to a cloud market study initiated by the U.K.’s Competition and Markets Authority, the firm said that it “firmly believes that the cloud services market is functioning well.”

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#

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#files #antitrust #complaint #accusing #

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#stifling #cloud #competition

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