The showdown between tech firms finds Google advocating greater openness in digital markets, despite its alleged abuse of dominance elsewhere
Google alleges Microsoft’s anti-competitive behaviour is costing EU businesses at least €1bn per year
On 25 September 2024, Google filed an antitrust complaint with the EC regarding Microsoft’s licensing terms for its various software products. The complaint alleges that Microsoft is unfairly restricting competition by making it more difficult for consumers to use Microsoft products, including Windows Server and Office tools such as Word or Excel, with competing cloud services. In a blog post describing its filing, Google claims that these restrictive licensing terms cost EU businesses at least €1bn (£833m) per year and threaten the bloc’s global competitiveness, latching onto one of the main themes of the incoming Commission’s approach to tech regulation. The EC will now be required to conduct an initial assessment of Google’s complaint and to consider whether a formal investigation into Microsoft’s conduct is required.
The complaint to the EC claims that Microsoft marks up its software services five-fold for customers using a competing cloud provider
Google specifically claims that Microsoft charges customers up to five times more to run Windows and Office software products over a competitor’s cloud service than it charges users of its own Azure services. The complaint also alleges that Microsoft has created technical barriers for users of other cloud services by limiting security patches for software products and complicating interoperability. Google notes that it believes there to be no existing technical barriers to the integration of Microsoft software with Google or Amazon Web Services (AWS) cloud systems that would warrant this increased cost and worsened functionality. Microsoft’s history of restrictive licensing terms is also central to Google’s complaint, as the firm cites the EC’s ongoing investigation into Microsoft’s tying of Teams productivity software to Office products as evidence of continued non-compliance with antitrust laws. Summarily, Google alleges that Microsoft is both harming EU businesses financially and degrading the resilience of a core level of the digital network stack.
Google finds common cause with smaller, EU-based cloud firms
Google’s complaint comes months after Microsoft and the Cloud Infrastructure Service Providers in Europe (CISPE) announced a deal in July 2024 to loosen licensing terms to benefit smaller, sovereign European cloud providers that resulted in the industry group rescinding its earlier complaint to the EC. The CISPE’s original filing against Microsoft, made in November 2022, largely mirrored Google’s complaint as well as a May 2024 complaint from the Spanish Association of Startups which also cites the anti-competitive nature of Microsoft’s software licensing terms. All of the complaints include alleged findings that Microsoft’s market share in cloud in Europe grew exponentially – by over 800% in the CISPE’s estimate – as a result of the introduction of more restrictive terms. Despite briefly finding common cause with Google, the CIPSE complaint also advocated that the EC should leverage the Digital Markets Act to address dominance in key markets, a point likely unpopular with the designated gatekeeper. Nonetheless, as regulators in Denmark, Spain and the UK pursue market studies into the cloud services sector and regulators in France and the Netherlands await ex-ante relief from the EU Data Act, Google finds itself again advocating greater openness in digital markets, though in a specific and limited context. That advocacy provides a sharp contrast (and a sense of irony) to the numerous ongoing investigations into Google’s anti-competitive behaviour in various parts of the internet value chain.
