Google accuses Microsoft of anti-competitive Cloud practices

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Google accuses Microsoft of anti-competitive Cloud practices
Credit: © Reuters.

By Geoffrey Smith -- Alphabet (NASDAQ: GOOGL ) took aim at Microsoft's (NASDAQ: MSFT ) increasingly potent Cloud services offering, telling Reuters that it is "anti-competitive" and urging EU regulators to crack down on its rival's deals with smaller companies.

"Microsoft definitely has a very anti-competitive posture in cloud," Google Cloud president Amit Zavery said in an interview with the news agency. "They are leveraging a lot of their dominance in the on-premise business as well as Office 365 and Windows to tie Azure and the rest of cloud services and make it hard for customers to have a choice."

Microsoft had softened the terms of its offering to European cloud hosting companies last October in response to concerns that it was using its dominance in the broader software market to squeeze out rivals.

French cloud services provider OVH Groupe (EPA: OVH ), Germany's Nextcloud, Italian peer Aruba, and a Danish association of cloud service providers had all complained to the European Commission about Microsoft's practices and licensing deals, alleging discriminatory pricing and other unfair license terms.

However, it's not clear whether the changes offered by the Redmond-based giant will be enough to stop a new investigation into it by EU antitrust regulators.

The EU, which has typically been more active than U.S. regulators in imposing fines on Big Tech for anti-competitive behavior, is due to take a decision on whether or not to open an investigation in the coming days or weeks.

Microsoft is the fastest-growing of the major cloud providers, having steadily eaten into the substantial first-mover advantage enjoyed by Amazon Web Services (NASDAQ: AMZN ) in the last couple of years. Microsoft's Azure claims a global market share of around 23%, according to data compiled by Synergy Research Group, while Amazon's market share has hovered around the 30% level in recent years. Google Cloud's share is around 11%, according to Synergy.

The market for cloud hosting services is worth over $200 billion a year and is expected to grow robustly in the coming years, due to digitization trends across society and, notably, the spread of Artificial Intelligence applications.

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