Google Cloud files complaint with European Commission over Microsoft’s cloud licensing practices

Google Cloud has emerged as the latest party to take issue with Microsoft’s strategy of charging enterprise customers more for running its software in competing cloud environments by filing a complaint with the European Commission.

The internet search giant’s public cloud arm claims the practice harms customers and infringes European Union law, and has accused Microsoft of “leveraging its software monopoly” to lock customers into its public cloud platform, Azure.

Speaking at a press conference to announce the complaint’s filing, Amit Zavery, vice-president, general manager and head of platform at Google Cloud, sketched out details of how Microsoft is allegedly using its dominant position in enterprise IT to make it cost-prohibitive for customers to use its competitors’ clouds.

“Many customers and businesses use Microsoft products in their IT environment, be it in their own private datacentres, on-premise and in the cloud as well, and predominant to that one is the Windows Server Licenses operating system, which is probably 70% of market share in the IT environment,” he said.

“What Microsoft does is restrict those licences to be taken to other cloud providers and puts them all towards Azure, and [in doing so is] linking the on-premise products, as well as Windows Server, to Azure, which are really two different markets. One is around the operating system and on-premise, and the other one is about cloud.

“That’s why we believe this regulatory action is the only way to end Microsoft vendor lock-in and for customers to have a choice, and create a level playing field for customers,” said Zavery.

Because, he said, as things stand, it’s difficult for customers to choose the “best product and best technology out there” to use for their Windows Server licences.

“It could be Azure, it could be AWS [Amazon Web Services], it could be other European vendors, or it could be Google Cloud, but whatever makes sense for them, they should be able to choose,” said Zavery. “So, to make this happen, we are basically asking the EC to look into this, and that’s why we’re filing this complaint.”

Zavery described Windows Server as being the “backbone of the IT environment” for private enterprises and public sector organisations because it could be used on “any hardware or any cloud” without issue.

“But as soon as Microsoft got into the cloud space and became serious about cloud, they started tying what you did with Windows Server to Azure, and they created a linkage between two unrelated products and made sure the customer [was] forced down the path of choosing Azure as the only place they can easily deploy the Windows Server,” he said.

“That’s really [a] bundling issue, which creates less choice … for customers. And this lock-in creates a lot of harm for customers [because] organisations have less choice [and] they have higher costs.”

Zavery further claimed there is a 400% markup for customers that want to run Windows Server software in non-Azure public clouds, whereas a customer that wants to migrate the same licence to run in Azure can do so for no additional cost.

“This [400% markup] is advertised by Microsoft on their website, [where the company is] telling customers, if you choose somebody else, you will have to pay extra as well … you also have less security and reliability, [because it restricts] access to a lot of updates on third-party cloud providers.”

Previous complaint

Google is far from the first organisation to take issue with Microsoft’s controversial cloud licensing practices, and it’s also not the first time Microsoft’s stance on this matter has been referred over to the European Commission to investigate.

A complaint about Microsoft’s cloud licensing practices was previously filed by the Cloud Infrastructure Service Providers in Europe trade body in November 2022 with the European Commission, but was later withdrawn in July 2024 after the pair struck a $22m deal.

Computer Weekly contacted Microsoft for a response to Google Cloud’s complaint to the European Commission, and received the following statement from a company spokesperson.

“Microsoft settled amicably similar concerns raised by European cloud providers, even after Google hoped they would keep litigating,” they said. “Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission.”