Google Urges British Competition Authority To Take Action Against Microsoft

Google has urged UK competition regulators to take action against Microsoft (photo: x @googlecloud)

Google has urged UK competition regulators to take action against Microsoft, claiming that its business practices have left competitors in significant drawbacks.

Microsoft and Amazon are also facing increased worldwide attention regarding their dominance in the cloud computing industry, where regulators in the United Kingdom, the European Union, and the United States are investigating their market power.

The UK's Competition and Markets Authority (CMA) investigated the country's cloud computing industry in October, after being referred by the Ofcom media regulator highlighting Amazon and Microsoft's dominance in the market.

In 2022, Microsoft's Amazon Web Services (AWS) and Azure services share a combined market share of 70-80% in public cloud computing infrastructure services in the United Kingdom, as mentioned by Ofcom. Google's cloud computing division is in the nearest competing position, with a market share of around 5-10%.

In a letter submitted to CMA, Google stated that Microsoft's license practice unfairly prevents customers from using competing services, even as secondary providers with Azure.

"With Microsoft's license restrictions primarily, customers in the UK have no economical alternative but to use Azure as their cloud computing service provider, even if they prefer the price, quality, security, innovation and features of competitors," Google said in a letter to CMA., quoted by VOI from Reuters.

The practice directly harms customers and is the only significant obstacle to competition in the United Kingdom cloud computing market, the company said.

Microsoft last year renewed its licensing regulations to address such concerns and encourage competition, although the changes do not satisfy competitors.

A Microsoft spokesman said the company had been working with independent cloud providers to address concerns and provide opportunities, and more than 100 providers around the world had taken advantage of the changes.

"As the latest independent data show, the competition between large-scale cloud providers remains healthy. In the second quarter of 2023, Microsoft and Google experienced a small growth compared to AWS, which remains a global market leader with a significant difference," said a Microsoft spokesperson.

Google Cloud's Vice President, Amit Zavery, criticized Microsoft's practices, and said his company was committed to a multi-cloud approach, where customers could easily switch between providers according to their needs.

"Many of our cloud software and services operate with each other, and can run in AWS or in Azure as well, so you are unlimited," he said. "If this is not fixed, in the end you will have fewer cloud providers, and innovation will not actually happen, and investment will begin to shrink."

The question is Microsoft's decision to update the requirements for using Windows licenses or other software in the cloud, which basically generates higher costs if customers use Google or AWS than Microsoft's Azure.

When asked why Amazon, which has a cloud market share greater than Microsoft, poses no similar anticompetitive risk, Zavery said that AWS consumers do not face the same restrictions.

"There are some problems, in terms of cloud interoperability, but we can fix them. That is talk between providers, which is well understood, and customers force the conversation," he said. "The problem we face with Microsoft is that there are no technical problems, but there are licensing restrictions which means we are now prevented from competing."

Google made six recommendations to CMA, including forcing Microsoft to increase interoperability for customers using Azure and along with other cloud services, and barring them from holding back security updates for those switching.