Google complained to Microsoft due to 400% markup on Windows Server in competitor clouds

Google has filed an antitrust complaint with EU regulators, accusing Microsoft of unfair licensing terms. Google, which ranks third behind Microsoft and Amazon in the cloud services market, argues that Microsoft’s licensing terms make it more difficult and expensive to use Windows Server and Office products on cloud infrastructure other than Azure.

Google Cloud Vice President Amit Zavery told reporters that Microsoft has forced customers to pay a 400 percent markup to continue using Windows Server from competing cloud providers, but that markup does not apply to Azure.

Google filed the complaint just months after Microsoft reached an agreement with a group of European cloud infrastructure providers (Cloud Infrastructure Services Providers in Europe, CISPE), who raised similar concerns about Microsoft’s licensing practices. CISPE has agreed to withdraw its 2022 EU complaint through a deal allowing group members to provide Microsoft apps and services on their on-premises cloud infrastructure. Google, obviously, was not included in the list of these suppliers.

As a result of the agreement, an independent European Cloud Observatory (ECO) was created, which included Microsoft, European cloud infrastructure providers and European customer associations. Amazon Web Services has been critical of the deal, saying Microsoft is making only “limited concessions for certain CISPE members that demonstrate there are no technical barriers preventing it from doing what’s right for every cloud customer.”

Naturally, Microsoft is unhappy with Google’s complaint. “Microsoft has amicably resolved similar concerns raised by European cloud providers, even after Google hoped they would pursue legal action,” said Microsoft spokesman Robin Koch. “[…] we expect that Google will not be able to convince the European Commission.”

Microsoft is currently facing antitrust scrutiny of its cloud practices in the UK, where regulators are investigating Microsoft and Amazon’s cloud licensing policies. At the same time, the Federal Trade Commission is examining AI investments from Microsoft, Amazon and Google and how they relate to cloud services.