According to a letter that Reuters obtained, Google (GOOGL.O) has requested that the British antitrust authority take action against Microsoft (MSFT.O). The company claims that Microsoft’s business methods have disadvantaged competitors considerably since the company began using them.

Companies such as Microsoft and Amazon (AMZN.O.) have been subjected to increasing scrutiny worldwide due to their dominant position in the cloud computing business. Regulators in the United States, the European Union, and the United Kingdom are investigating their market strength.

Following a referral from the media regulator Ofcom, which highlighted Amazon’s and Microsoft’s market dominance, the Competition and Markets Authority (CMA) initiated an inquiry into the cloud computing business in the United Kingdom in October.

By 2022, Ofcom reported that Amazon Web Services (AWS) and Microsoft Azure had a combined market share of 70 and 80 percent of the public cloud infrastructure services market in the United Kingdom. Google’s cloud business was their most direct competition, with a 5–10% market share.

In a letter sent to the Competition and Markets Authority (CMA), Google stated that Microsoft’s licensing arrangements unjustly prohibited users from adopting competing services, even when combined with Azure as a secondary supplier.

In their letter to the Competition and Markets Authority (CMA), Google stated that “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.” This is the case even if they prefer competitors’ pricing, quality, security, innovations, and features.

According to the business, those activities were the sole barrier to competition in the cloud computing sector in Britain, and they caused direct injury to customers through their actions. The CMA declined to comment on the matter.

TAKING ACTION TO RESOLVE CONCERNS

Microsoft’s license regulations were changed the previous year to address such concerns and foster competition; nevertheless, the modifications did not satisfy competitors.

According to a representative for the firm, Microsoft has collaborated with independent cloud providers to resolve issues and provide opportunities. The spokesperson also stated that more than one hundred people worldwide have taken advantage of the adjustments.

“The most recent data from reliable sources demonstrates that the battle amongst cloud hyperscalers is still intense. Microsoft and Google made minor advancements in Amazon Web Services (AWS) during the second quarter of 2023. However, according to a representative for Microsoft, AWS continues to maintain its position as the worldwide market leader by a substantial margin.

During an interview with Reuters, the vice president of Google Cloud, Amit Zavery, expressed his disapproval of Microsoft’s techniques and that his firm is dedicated to a multi-cloud model in which customers can switch between providers based on their requirements.

“A lot of our software and cloud services interoperate and can run on AWS or Azure as well, so you’re not restricted,” added the executive. “If you don’t fix this, eventually you will have fewer cloud providers, and then innovation will not really happen, and investments will start shrinking.”

Microsoft’s decision to change the conditions when customers sought to utilize their Windows or other software licenses in the cloud was at issue. This move resulted in higher prices for customers using Google or Amazon Web Services (AWS) rather than Microsoft’s Azure.

In response to a question about why Amazon, which holds a higher share of the cloud market than Microsoft, does not represent a risk comparable to that of Microsoft, Zavery stated that customers of Amazon Web Services are not subject to the same constraints.

“In terms of cloud interoperability, there are a few problems, but we are able to resolve those complications. That is a conversation that is taking place between providers, which is something that is well acknowledged, and customers are pushing that conversation,” he added.

“The issue that we are having with Microsoft is that there is no technical problem; however, you have licensing restrictions, which means that we are now being prevented from competing with other companies.”

Google presented the CMA with a total of six proposals. These recommendations included mandating that Microsoft enhance interoperability for customers who use Azure in conjunction with other cloud services and prohibiting Microsoft from withholding security updates from customers who switch their services.