Google (GOOGL.O) has called on Britain’s antitrust regulator to take action against Microsoft (MSFT.O), claiming its business practices had left rivals at a significant disadvantage, according to the letter seen by Reuters. Microsoft and Amazon (AMZN.O) have faced mounting global scrutiny over their dominance of the cloud computing industry, with regulators in Britain, the European Union, and the U.S. probing their market power. In the U.K., the Competition and Markets Authority launched an investigation into the industry in October, following a referral from media watchdog Ofcom that highlighted Amazon’s and Microsoft’s tight grip on the market. The CMA has identified features that make it harder for companies to switch or use multiple cloud providers. It is mainly concerned with how Microsoft and Amazon treat software licensing. It said they impose fees and technical barriers that discourage customers from switching to rival cloud services and limit the ability to use multiple providers. Microsoft and Amazon also give significant discounts to specific customers. The CMA added that it would work constructively with both companies to resolve any concerns. However, the Computer and Communications Industry Association, a group that includes Amazon, warned the inquiry could harm innovation in the industry.
The CMA started its probe after Ofcom concluded that Amazon and Microsoft dominated the public cloud infrastructure services market. That includes services such as data storage and processing, which businesses access over the Internet rather than from their premises. In 2022, Ofcom said Amazon Web Services and Microsoft Azure had a combined 70-80% market share, with Google’s division a distant third with around 10 percent.
In the letter seen by Reuters, Google argued that Microsoft’s licensing restrictions unfairly discouraged customers from using rival services even as a secondary provider alongside Azure. Google said that deprived them of the prices, quality, innovation, and security that rivals offer. “Our customers should have the flexibility to choose the best service for them, including a choice between competing platforms, without being forced to buy services they do not need or cannot fully use,” the company said in the letter.
Microsoft denied wrongdoing and said it was committed to ensuring the industry remained competitive and open. It added that it had already changed its licensing rules last year to address customer feedback. It said it welcomed the opportunity to discuss any issues the CMA may have with its cloud products and licensing arrangements.
Two progressive Democrats, Senator Elizabeth Warren and Federal Trade Commission Commissioner Rohit Chopra, tweeted support for legal action against tech giants that break the law. That starkly contrasts with Republicans, who have signaled their opposition to bringing such an antitrust lawsuit against Google, arguing that it would hurt consumers and companies. Earlier this week, a Justice Department staffer said senior officials have considered bringing an antitrust lawsuit against the tech firm.
