Google Cloud Exec: Microsoft Is ‘Paying Off Complainants’ After Antitrust Ruling

‘Microsoft's playbook of paying off complainants rather than addressing the substance of their complaint hurts businesses and shouldn't fool anyone,’ said Google Cloud top executive Amit Zavery, following the results of a European antitrust complaint ruling today.

Google Cloud is slamming rival Microsoft after the company secured a multimillion-dollar deal to settle a European antitrust complaint regarding its cloud licensing practices.

Microsoft's playbook of paying off complainants rather than addressing the substance of their complaint hurts businesses and shouldn't fool anyone,” said Amit Zavery, general manager and vice president, and head of platform for Google Cloud, in an email to CRN. “Many regulatory bodies have opened inquiries into Microsoft's licensing practices, and we are hopeful there will be remedies to protect the cloud market from Microsoft's anti-competitive behavior.”

In late 2022, the Cloud Infrastructure Services Providers in Europe (CISPE) filed a complaint with the European Commission alleging Microsoft's new contractual terms on Oct. 1 would harm Europe’s cloud ecosystem.

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On Wednesday, the CISPE said it has resolved the issue and will withdraw its complaint to the European Commission.

Microsoft To Compensate CIPSPE Members, Develop New Product

As part of the deal, Microsoft will compensate CISPE members for lost revenues related to their cloud computing licensing costs over the past two years.

The Redmond, Wash.-based software and cloud giant also said it will develop a product enabling CISPE's members to run Microsoft software on their platforms on the Azure cloud infrastructure with prices equal to Microsoft's prices.

Microsoft President Brad Smith said that after working with CISPE and its European members for more than a year, he's pleased that Microsoft has resolved the issue.

“We've not only resolved their concerns of the past, but also worked together to define a path forward that brings even more competition to the cloud computing market in Europe and beyond,” said Smith in a statement.

Microsoft declined to comment on Google Cloud's remarks when contacted.

Google Cloud: We Will 'Continue To Fight Against Microsoft's' Licensing

Google Cloud said regardless of the CISPE’s decision, Google will still fight against Microsoft's licensing tactics which Google sees as unfair.

“We are exploring our options to continue to fight against Microsoft's anti-competitive licensing in order to promote choice, innovation, and the growth of the digital economy in Europe,” said Google's Zavery (pictured).

Furthermore, Google Cloud said the settlement doesn't apply to all CISPE members and appears to violate CISPE's own “red lines” put forward at the beginning of settlement negotiations.

In an email to CRN, Google said these “red lines” include: any agreement must be principle-based and apply to all cloud infrastructure providers operating in Europe.

Additionally, any agreement must benefit all customers in Europe and any business must have the right to run the software they license on the cloud of their choice, without financial or technical penalties.

Lastly, Google highlighted that any CISPE settlement must be transparent and clear, open to scrutiny, future-proof and auditable for compliance over time.

Google, Microsoft and Amazon Cloud Market Share

AWS, Microsoft and Google Cloud account for a combined 67 percent share of the global cloud services market as of first quarter 2024.

Enterprise spending on cloud companies' infrastructure services reached well over $76 billion during Q1 2024, representing an increase of $13.5 billion or 21 percent year over year.

AWS is the worldwide cloud services leader with 31 percent share of the global market, followed by Microsoft at 25 percent share, then Google at 11 percent share.

Other leading global cloud companies—such as IBM, Oracle, VMware, Tencent and Huawei—each own roughly 1 percent to 2 percent market share.

Microsoft has been gaining market share more than any other company, growing from 22 percent share in Q1 2022 to 25 percent share as of Q1 2024.