Google Accuses Microsoft of Anticompetitive Cloud Practices

Microsoft (MSFT) is facing antitrust accusations about its cloud strategy from tech rival Alphabet’s (GOOGL) Google division. 

Google filed a complaint Wednesday with the European Union’s enforcement arm alleging that Microsoft is using anti-competitive tactics to drive clients to its Azure cloud platform. Microsoft required customers that ran Windows on its rivals’ cloud platforms—specifically Google Cloud, Amazon (AMZN) Web Services, and Alibaba (BABA) Cloud—to pay a 400% markup, Google Cloud Vice President Amit Zavery said in a blog post announcing the complaint.

Microsoft leads the pack in cloud revenue, generating more than $105 billion in the latest fiscal year compared with $90.8 billion from AWS and $33.7 billion from Google Cloud. Microsoft’s figure includes its entire “Intelligent Cloud” segment, in addition to Azure operations.

Google cited a 2023 study from CISPE, a European cloud services organization with members including Amazon, that found that public and private entities were paying Microsoft as much as 1 billion Euros ($1.1 billion) annually in licensing penalties.

Microsoft agreed in July to settle another antitrust complaint, filed by CISPE, related to its cloud licensing for 20 million euros.

“Microsoft settled amicably similar concerns raised by European cloud providers, even after Google hoped they would keep litigating,” a Microsoft spokesperson said. “Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission.”

Microsoft’s shares were recently up 0.5%, while Alphabet’s were down 0,3%.