Google Says Microsoft Cloud Practices are Anti-Competitive

Facts

• Google Cloud has accused Microsoft of anti-competitive cloud computing practices, criticizing the company's imminent deals with multiple European cloud vendors. Google Cloud's Vice President, Amit Zavery, said that Google had consequently raised the issue with antitrust agencies.¹
• While there hasn't been an official announcement, reports say that Microsoft has agreed to a deal that will change how it sells cloud packages in Europe. In 2019, Microsoft changed its terms and conditions to require customers to buy an additional license to run Office 365 and other productivity applications on a third-party provider.²
• Google trails behind Microsoft in the multi-billion dollar cloud computing industry, while Amazon sits in the top spot. Zavery told Reuters that the licensing restrictions make it "difficult" for their customers to choose other providers.¹
• This news comes a day after Microsoft reportedly offered to change its cloud computing practices to settle antitrust complaints from Europe. These European companies include French company OVHcloud, Italian service provider Aruba, and a Danish association of cloud providers. The EU Commission has fined Microsoft more than $2.3B in the last decade.³
• Microsoft responded to Google Cloud's claims by citing a blog post from 2022. In the post, the company's President, Brad Smith, claimed stated that Microsoft has a "healthy number two position" in the industry with a 20% market share; a Microsoft spokesperson has also told Reuters that they are "committed to the success of the European Cloud Community."⁴

Sources: ¹Reuters, ²Tech Monitor, ³Techcircle, and ⁴Seeking Alpha.

Narratives

• Narrative A, as provided by Harvard Business Review. If reigning in big tech is the goal, the reality is that authorities have a poor track record of developing successful lawsuits that proceed to trial. However, the stars may be aligning to reshape such laws dramatically. A message needs to be sent to companies that their activities, acquisitions, and market decisions are being scrutinized — including Microsoft's actions to develop its cloud computing prowess.
• Narrative B, as provided by The Hill. Regulators have historically sought to limit the market power of large corporations. However, when there are fewer players in a market this doesn't always mean that there are fewer services to choose from or fewer choices in practices. US legislators should be primarily focused on nurturing a robust, competitive market in the cloud computing space, and Microsoft's actions in Europe have been a partial step in this direction.