Google Calls Microsoft's Cloud Strategy Anti-Competitive, Slams Its Ties With European Providers

Google Cloud, a subsidiary of Alphabet, has accused Microsoft of anti-competitive cloud computing tactics and criticized its impending partnerships with various European cloud suppliers.

In a report by Reuters, Google argues that Microsoft does not address larger concerns about its license conditions.

Questionable European Ties

Amit Zavery, vice president at Google Cloud, told Reuters that the firm has brought up the problem with antitrust authorities and requested European Union (EU) antitrust regulators to take a closer look at Microsoft and its European arrangements.

Microsoft replied with a link to a blog post from May of last year in which its president Brad Smith said the company "has a healthy number two position when it comes to cloud services, with just over 20 percent market share of global cloud services revenues."

A Microsoft representative said on Thursday, Mar. 20, "We are committed to the European Cloud Community and their success."

Google lags behind Amazon and Microsoft in the rapidly expanding multibillion-dollar cloud computing sector, where strong competition exists between the three companies.

Due to a small number of corporations' dominance and the industry's growing importance as more and more businesses migrate their services to the cloud, it has lately come under increased regulatory scrutiny in countries like the US and the UK.

Antitrust Accusations

In a report earlier this week, a source close to the situation confirmed that Microsoft has promised to alter its cloud computing methods in exchange for suspending antitrust accusations from a handful of smaller competitors. This will reportedly prevent a probe by the EU.

The EU did not provide a statement.

Zavery said in an interview late Wednesday, Mar. 29, "Microsoft definitely has a very anti-competitive posture in [the] cloud. They are leveraging a lot of their dominance in the on-premise business as well as Office 365 and Windows to tie Azure and the rest of cloud services and make it hard for customers to have a choice," Zavery said.

He added, "When we talk to a lot of our customers, they find a lot of these bundling practices, as well as the way they create pricing and licensing restrictions, make it difficult for them to choose other providers."

Bigger Problems to Solve

Zavery said that Microsoft would only gain from striking separate arrangements with several smaller European cloud suppliers.

He said Microsoft is buying out the complainers selectively and not offering the same conditions to everyone. This apparently gives Microsoft an unfair edge and binds the complainers even closer to the company.

They have so much sway in the market that they can go and do things on their own time, but whatever they are providing, Zavery said there should be conditions across for everyone, not just for one or two they have selected and picked.

The point Zavery wants to make to the regulators is that settling with just one or two providers will not address the bigger problem. "And that's the problem we need to really resolve, not individual vendors' problems," Zavery stated.