What you need to know
- Reportedly, Google has sent a letter to the UK's Competition and Markets Authority (CMA), petitioning it to take action against business practices Microsoft uses in cloud computing that it views as anticompetitive.
- Specifically, Google argues that Microsoft should not be able to restrict the use of its softwares to Azure, and that it shouldn't cost more to use them with other cloud providers.
- Google included six recommendations in its letter, including a request to force Microsoft to make Azure more interoperable with other cloud providers and one to ensure that security updates won't be blocked for anyone who moves to a new one.
- The UK's communications regulator Ofcom found that Amazon and Microsoft owned a combined 70-80% of the UK cloud computing market in 2022 earlier this year, referring the situation to the CMA for investigation.
UPDATE Dec. 6 @ 1:37 p.m. ET: Amazon has joined Google in its criticism of Microsoft's business practices in the UK cloud market in a new letter posted on the CMA's website. Like Google, Amazon argues that Microsoft's licensing policies are unfairly anticompetitive.
“To use many of Microsoft’s software products with these other cloud services providers, a customer must purchase a separate license even if they already own the software,” Amazon said. “This often makes it financially unviable for a customer to choose a provider other than Microsoft.”
Our original story follows below.
According to a report, Google has petitioned the Competition and Markets Authority (CMA) — the UK's business regulator — to pursue action against Microsoft over business practices in the cloud computing market it views as unfair.
The report indicates that in a letter Google sent to the CMA, it argued that Microsoft Azure licensing policies drive users away from using other providers to an unreasonable degree.
“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.
Google, in total, reportedly made six recommendations to the CMA in its letter. One was to demand that Microsoft improve interoperability between Azure and other cloud options, while another was to ensure that the Redmond firm couldn't block software security improvements for anyone that chose to move to a different provider.
Notably, this October, Britain's communications watchdog Ofcom shared its findings that Amazon Web Services and Microsoft Azure had a combined 70-80% of UK cloud computing market share in 2022, with Google following them at 5-10%. Ofcom referred the market to the CMA for further investigation, which began shortly afterward.
In 2022, Microsoft updated its cloud policies in an effort to assuage antitrust concerns. However, these changes did not placate Google, which is taking issue with the fact that some types of Microsoft software aren't compatible with major platforms that rival Azure, and that folks using ones that are are saddled with extra costs.
"On premises, they could run it on any hardware, there was no restriction really," said Google Cloud Vice President Amit Zavery in an interview in June. "But now if you want to run it on any other cloud provider, you have to pay a tax and penalty to Microsoft if it's not running on Azure, or in the preferred providers of their choice."
Even though Amazon controls a larger portion of the market than Microsoft does, Zavery says Google isn't as concerned about AWS since it doesn't enforce 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, speaking to Reuters. “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.”
