The relationships between technology companies are often intriguing. These firms can be both competitors and collaborators at the same time. For example, they might work together on a project while also suing each other for millions of dollars or accusing each other of wrongdoing. Most recently, Google accused Microsoft of anti-competitive practices in the cloud computing market. Google sent a letter to the authorities alleging that Microsoft is using its dominant position to push customers towards its own cloud services. Here are the details…
Google Accuses Microsoft of Monopolistic Practices in Cloud Computing
In a letter to the US Federal Trade Commission, Google alleges that Microsoft is using its dominant position in the enterprise software market to push customers towards its Azure cloud computing platform. Specifically, Google takes issue with the integration of Windows Server and Office products into Azure. It argues that this integration makes it almost impossible for customers to switch to other cloud computing platforms, thereby creating an ecosystem of dependency.
Google also points to Microsoft’s practice of charging additional fees to third-party cloud providers for running its software. This policy, enacted by Microsoft in 2019, has resulted in what Google deems an anti-competitive environment in the cloud services sector. Google’s accusations are in line with the concerns of other industry observers. Corey Quinn, a renowned cloud economist, has noted a worrisome trend in the industry towards making it more difficult for customers to switch cloud providers. He has described this trend as “anti-competitive” and “increasingly Herculean.”
Microsoft made the following statement on the subject: We have made changes to our cloud licensing terms to address licensing concerns and provide more opportunity for cloud providers. Worldwide, more than 100 cloud providers have already taken advantage of these changes. And as the latest independent data shows, competition between cloud hyperscalers remains healthy. In the last quarter of 2022 Microsoft and Google made small gains on AWS, which continues to remain the market leader by a significant margin.
The FTC is currently investigating Google’s allegations against Microsoft. The outcome of this investigation could have a significant impact on the future of cloud competition. If the FTC finds that Microsoft is engaging in anti-competitive practices, it could order the company to change its behavior. This could open up the cloud computing market to more competition and give customers more choice.
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