War of the giants. Google has reported Microsoft to the European Commission for anti-competitive practices in cloud licensing. The Silicon Valley company believes that the multinational founded by Bill Gates is restricting the ability of European companies to move workloads to competing platforms, forcing Windows Server customers to use Azure or imposing a price increase of up to 400%.
“Microsoft locked its customers into Teams, even though they preferred other providers. Now, the company is doing exactly the same thing by pushing businesses to Azure, its cloud platform,” Google said in a statement. “Microsoft is the only cloud service provider using these tactics that are causing significant harm to European businesses and governments,” the statement added, estimating the cost to those affected in Europe at €1 billion per year, in addition to the damage caused to other companies. “This creates increased risk for organizations exposed to Microsoft’s inadequate security culture,” it added.
What Google is saying is that Microsoft limited its customers’ use of platforms outside of Azure when cloud competition began to intensify: “The most significant restriction came in 2019, when Microsoft incorporated new terms into its licenses, imposing extreme economic penalties on companies that decided to use Windows Server software on Azure’s closest competitors such as: Google Cloud or AWS.
“Microsoft’s own statements indicate that customers who want to move their workloads to these competitors must pay five times more. And for those who choose to continue running Windows Server on other clouds (despite the increased costs), Microsoft has introduced additional obstacles, such as limited security patches and other interoperability barriers,” the statement added.
The European Commission has received the complaint and will begin the analysis based on standard procedures. The case will return to the Competition portfolio that Teresa Ribera will assume in a few months.
This is not the first complaint against Microsoft for alleged abuse of its position in the cloud. The Spanish Association of Startups filed a similar complaint before the National Commission of Markets and Competition (CNMC) after understanding that the American multinational commits “restrictive practices observed in the cloud services market” that “would impose artificial barriers that “limit the ability of startups to compete fairly and competitively.
The complaint by the Spanish startups is similar to the one that the tech giant is currently filing with the European Commission. The association, which represents some 700 startups, highlights the difficulties that Microsoft generates in the portability of data to services that it does not control, or “contractual conditions that restrict competition in software licenses, which would make it difficult or prevent the free choice” of providers of these services, thus reducing the capacity for choice and the flexibility that startups need to be resilient, innovate and grow.
