To the critics of Big Tech it will make you smile but it’s not every day you see one head-on collision among the American tech giants. Even less normal is the fact that they call upon an authority like theEuropean Unionwhich has been fighting for years against the monopolistic practices of corporations American. Alphabet, the holding company that controls the Google galaxy, filed a complaint with the European Commission on Wednesday against Microsoft for “anti-competitive practices” operated by the Redwood giant to promote the use of the Azure platform, one of the main ones in the cloud computing. An escalation in thebitter trade war which pits Google, Microsoft and Amazon Web Services against each other for dominance of this increasingly fundamental market.
Windows Server System in the Crosshairs
At least judging by the tone of the Mountain View company’s press release, Google’s management he’s had enough of the methods borderline used by Microsoft to promote its Azure platform, enough to require direct intervention by the European Union on the matter. Amit Zaverygeneral manager of Google Cloud, launched an unequivocal attack on Microsoft during a press conference. “We believe that this action with the regulator is theonly way to end Microsoft’s lock-in, to allow customers to have a choice and create fair market conditions for the competitors”.
“Microsoft Software License Terms prevent European organizations to move their current workloads from Azure to competing clouds.” If found, this practice could open the door to heavy fines for abuse of dominant position. The issue is not as abstruse as it might seem: according to Zavery, Microsoft imposes on its customers a overcharge of the 400% to continue using their operating system on third-party platforms. In addition to paying a much lower price, users who chose to entrust their data to Azure would have had Security Updates more frequent and timely.
A billion euro abuse
The implications of this clash are potentially enormous: according to a study published last April by the consulting firm McKinsey, the business of cloud computing is growing at a rate of 20% every year in the member states of the European Union and has great growth potential, given that two thirds of the companies in the EU countries carry out less than half of their workflows on the cloud. The association of European operators Cispe, in a 2023 study, estimated that European companies and government bodies pay more than a billion euros per year at Microsoft as a consequence of these predatory practices. The Redmond company had avoided an official investigation by the European Union last July paying 20 million euros to Cispe to have the antitrust complaint withdrawn but the agreement does not include Google, Amazon and the Chinese Alibaba. Microsoft’s response came through a concise press release in which it is stated that Google had put pressure on on Cispe, failing: “just as they failed to convince European companies in the sector, we expect that Google will not be able to convince the European Commission either”.
Google flaunts its confidence, inviting the EU to act immediately, punishing these practices and giving users back the ability to choose freely. If the Commission were to uphold Google’s appeal, Microsoft would be forced to fight on equal terms with its rivals, without exploiting the almost monopoly in operating systems enterprise (more than 70% of European servers use Windows Server). In the past there were no vendor locks and Microsoft OSs ran smoothly on every type of cloud: since the launch of Azure in 2019 restrictions have starteda practice already seen in corporate messaging, where Microsoft has done everything to promote Teams to the detriment of rival Slack.
Last June, the Commission agreed with Slack, announcing sanctions that could reach 10% of turnover: in this case, since the cloud computing is increasingly crucial to Microsoft’s growth, the stakes are Still higher.