JasonDoiy
Alphabet’s (NASDAQ:GOOG) (GOOGL) unit Google has asked U.K.’s Competition and Markets Authority to take action against Microsoft (NASDAQ:MSFT), arguing that its business practices had left competitors at a significant disadvantage, Reuters reported citing a letter.
Microsoft and Amazon.com (AMZN) have faced scrutiny globally over their dominance of the cloud computing industry, with regulators in the U.K., EU and the U.S. scrutinizing their market power, the report added.
The U.K.’s antitrust regulator CMA had started a probe into the country’s cloud computing industry in October, after a referral from media regulator Ofcom that highlighted Amazon and Microsoft’s dominance in the market.
Ofcom said in an Oct. 5 press release that in 2022, Amazon Web Services, or AWS, and Microsoft had a combined market share of 70-80% in 2022, while Google was their closest competitor with 5-10% share.
Ofcom had noted that it identified features that made it more difficult for U.K. businesses to switch and use multiple cloud suppliers.
In a letter filed to the CMA, Google said Microsoft’s licensing practices unfairly discouraged customers from using rival services, even as a secondary provider beside 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 the to the CMA.
Google added that such practices harmed customers and were the only significant barrier to competition in U.K.’s cloud computing market.
Microsoft last year had revised its licensing rules to address such worries and promote competition, however, the changes did not satisfy competitors, the report noted.
A Microsoft spokesperson said that the company had worked with independent cloud providers to address worries and provide opportunity and that over 100 globally had taken advantage of the changes, the report noted.
“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 commented.
At issue was Microsoft’s decision to update the terms for when consumers wanted to utilize their Windows or other software licenses in the cloud, effectively leading to higher costs if they used Google or AWS other than Microsoft’s Azure, according to the report.
“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,” said Google Cloud Vice President Amit Zavery.
Google has made six recommendations to the CMA, including directing Microsoft (MSFT) to improve interoperability for customers using Azure and beside other cloud services, and restricting it from withholding security updates from those that switch, the report added.