Google drops cloud complaint against Microsoft

Google has withdrawn its cloud anti-competitiveness complaint against Microsoft, just weeks after regulators announced a cloud market investigation.

The tech firm filed the complaint with the European Commission (EC) back in September 2024, accusing Microsoft of trying to lock customers into Azure by making it difficult and costly to shift workloads to rival clouds, such as those offered by Google and AWS. Google called for regulators to force Microsoft to allow customers to use their licenses for Windows Server on any cloud at no additional cost.

In November, the EC announced a trio of market investigations into cloud services — and that appears to be good enough for Google.

“We filed our antitrust complaint with the European Commission (EC) to give voice to our customers and partners about the issue of anticompetitive cloud licensing practices," said Giorgia Abeltino, head of government affairs and public policy at Google Cloud Europe, in an update to the original blog post about the complaint.

"Today, we are withdrawing it in light of the recent announcement that the EC will assess problematic practices affecting the cloud sector under a separate process."

Abeltino said Google stands by its previous arguments against Microsoft's cloud market behaviour — including the accusation that Microsoft locks customers into Azure by imposing a 400% markup if they switch to rivals — and would continue to work to "advocate for choice and openness in the cloud market."

ITPro contacted Microsoft for comment, but had yet to hear back at the time of publishing. Last year when Google first filed its complaint to the EC, Microsoft told ITPro: "Microsoft settled amicably similar concerns raised by European cloud providers, even after Google hoped they would keep litigating. Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission."

Globally, the cloud market is dominated by three major players: Microsoft's Azure at about 20% share, AWS with 30% and Google with 13%. Data from Synergy Research Group this summer showed that US providers — including Amazon, Microsoft and Google — hold a 70% share of the market in Europe.

Cloud competition battle

Last summer, Microsoft agreed to a $22 million settlement with Cloud Infrastructure Service Providers in Europe (CISPE) to avoid an EC complaint after that organization accused it of anti-competitive tactics. As part of that battle, CISPE had released research that showed anticompetitive tactics in the European cloud market cost local businesses as much as €1 billion a year.

At the time, Google's head of platform for Cloud, Amit Zavery, said the Microsoft-CISPE deal was a "payoff" that wouldn't address key complaints. Reports at the time suggested Google tried to scupper the settlement with its own $512 million offer.

In August, the UK competition and Markets Authority (CMA) said that Microsoft and Amazon were both harming competition in the local cloud market — in the UK, each has a share above 30%.

The CMA said that there were "substantial barriers" to other providers entering or expanding in the market, and that customers were prevented from switching suppliers due to egress fees. At the time, Microsoft said the CMA had "missed the mark," while AWS said its report "disregards clear evidence of robust competition."

The EC investigates

In mid-November, the EC said it would investigate AWS and Azure to decide if Amazon and Microsoft should be designated as "gatekeepers" between businesses and consumers. Neither company meets preset thresholds under the Digital Markets Act (DMA) for that designation, but the EC still wants to assess their impact on the market.

A third investigation is considering whether the DMA is an effective tool to target practices that limit competitiveness in the European cloud market.

The first two investigations are expected to take a year, while the DMA market probe may take up to 18 months and lead to updates to those laws.

"Such services should be offered in a fair, open and competitive environment that fosters trust and secures Europe’s tech sovereignty," Henna Virkkunen, the EC's executive vice president for tech sovereignty, security, and democracy, said at the time.