In a significant strategic shift, Google has officially withdrawn its long-standing antitrust complaint against Microsoft concerning cloud computing practices within the European Union. The complaint, initially filed with the European Commission last year, accused Microsoft of leveraging its dominance in the Windows Server operating system to engage in anti-competitive behavior that effectively locked customers into its Azure cloud platform.
Why Google Filed the Complaint Initially
The original grievance from Google centered on what it described as substantial licensing penalties imposed by Microsoft. According to Google Cloud Vice President Amit Zavery, Microsoft was compelling customers to pay a staggering 400% mark-up to operate Windows Server on competing cloud platforms—a cost that Azure users did not bear. Furthermore, users of rival systems allegedly received security updates that were both delayed and more limited in scope.
A revealing 2023 study conducted by the cloud services organization CISPE highlighted the financial impact, finding that European businesses were paying up to 1 billion euros ($1.12 billion) annually due to these Microsoft licensing penalties. Google contended that Microsoft was employing a restrictive strategy similar to the one that locked customers into its Teams collaboration application, thereby forcing vendors toward Azure.
The Shift in Strategy and Regulatory Context
Google Cloud Europe's head of government affairs, Giorgia Abeltino, confirmed the withdrawal of the complaint. She explained the decision was made in light of the European Commission's recent announcement that it would assess problematic practices affecting the cloud sector through a separate, broader inquiry. This regulatory investigation into the entire cloud market was launched just last week, aiming to determine if tech giants like Microsoft and Amazon should face new restrictions to curb their market power.
Despite withdrawing the specific complaint, Google has affirmed its commitment to continue advocating for choice and openness in the cloud market with regulators and policymakers across the EU and the UK. The company's earlier stance, as emphasized by Zavery, was that the cloud market risked becoming increasingly restrictive without immediate regulatory intervention.
What This Means for the Cloud Market
The withdrawal signals a pivotal moment in the ongoing battle for cloud market share in Europe. While the direct legal confrontation between Google and Microsoft has been set aside, the issues at the heart of the complaint—licensing fees, vendor lock-in, and fair competition—are now under the microscope of the European Commission's wider investigation. The outcome of this probe could still lead to significant regulatory changes impacting how cloud giants operate within the EU.
