Google accuses Microsoft of ‘anti-competitive’ cloud practices
Google has come out to accuse Microsoft of anti-competitive practices within its cloud business. In a scathing letter addressed to US regulators examining the state of the industry, Google called out Microsoft for restrictive license terms on customers.
The letter was submitted as part of the Federal Trade Commission's (FTC) call for testimony. According to Google, such practices harm customers and the broader industry landscape.
Google's letter to the FTC shines a spotlight on Microsoft's dominant position in the market, leveraging its Microsoft Office and Windows Server product lines. Describing it as a "complex web," Google argues that this environment creates significant hurdles for users wanting alternatives to Microsoft Azure services.
Google's accusations come at a time of increased regulatory scrutiny for cloud providers globally. The UK regulator, Ofcom, has proposed referring cloud services providers, particularly Amazon Web Services (AWS) and Microsoft Azure, to the Competition and Markets Authority (CMA).
This move is prompted by concerns over the dominance of hyperscalers, who collectively hold a significant market share in the UK.
Ofcom's investigation has also revealed alarming practices related to "egress fees," which hinder customer mobility and competition by imposing high costs for transferring data from the cloud or to other providers.
As part of its response to the FTC, consumer rights group NetChoice argues that the threat to cloud competition does not stem from a lack of quality participants in the market. Instead, they highlight the issue of cloud providers employing policies that lock in customers.
The group raised concerns about contract clauses, predatory discounting, and other schemes that limit customer mobility. This leaves users with limited or unfavourable options.
NetChoice suggests that addressing these practices is crucial to fostering a healthy and competitive cloud market.
While Google's allegations align with long-standing concerns surrounding vendor lock-in in the cloud market, some scrutiny falls on the motivations behind these accusations. Could it be a case of the pot calling the kettle black?
Despite Google's efforts to expand its market share, it remains the smallest of the three major Western hyperscalers. It trails Microsoft and is significantly behind the market leader, AWS. Google has faced its share of anti-competition allegations, particularly in its advertising business, which has been the subject of antitrust lawsuits.