Google Asks CMA to Take Action Against Microsoft for Cloud Licensing

Google has formally asked the UK Competition and Markets Authority (CMA) to take action against Microsoft for its cloud licensing abuses.

“With Microsoft’s licensing restrictions in particular, UK customers are left with no economically reasonable alternative but to use Azure as their cloud services provider, even if they prefer the prices, quality, security, innovations, and features of rivals,” a Google letter to the CMA reads.

The CMA announced in October that it would investigate Microsoft and other public cloud providers in the wake of a referral from Ofcom, which claims that these firms purposefully make it difficult to switch and use multiple cloud providers via restrictive and expensive licensing policies. It singled out Microsoft in particular for its licensing practices.

“This is a £7.5 billion market that underpins a whole host of online services – from social media to AI foundation models,” CMA CEO Sarah Cardell said at the time. “Many businesses now completely rely on cloud services, making effective competition in this market essential.”

Microsoft in 2022 tried to address cloud licensing concerns in the EU but those efforts have apparently not satisfied its competitors. According to Ofcom, Microsoft and Amazon control a collective 70 to 80 percent of the UK public cloud infrastructure services market, compared to just 5 to 10 percent for Google, their biggest competitor.

“A lot of our software and cloud services interoperate, and can run on AWS or on Azure as well, so you’re not restricted,” Google Cloud vice president Amit Zavery told Reuters. “If you don’t fix this, eventually you will have fewer cloud providers, and then innovation will not really happen, and investments will start shrinking. There’s no technical issue with Microsoft, but you have licensing restrictions which means we are now being prevented from competing.”