Exclusive: Google says Microsoft’s cloud practices are anti-competitive

BRUSSELS, March 30 (Reuters) – Alphabet Inc’s Google Cloud (GOOGL.O) has accused Microsoft (MSFT.O) of anti-competitive cloud computing practices and criticized impending deals with several European cloud vendors, saying they do not resolve broader concerns about them. license terms.

In Google Cloud’s first public comments on Microsoft and its European deals, its vice president Amit Zavry told Reuters the company had raised the issue with antitrust agencies and urged EU antitrust regulators to take a closer look.

In response, Microsoft referred to the blog post In May last year, its president, Brad Smith, said the company was “a healthy second when it comes to cloud services, with a market share of just over 20 percent of global cloud services revenue.”

“We are committed to the European cloud community and their success,” a Microsoft spokesperson told Reuters on Thursday.

There is stiff competition between the two US tech giants in the fast-growing multi-billion dollar field of cloud computing, with Google trailing market leader Amazon (AMZN.O) and Microsoft.

The sector has recently come under increasing regulatory scrutiny, including in the US and UK, due to the dominance of a few players and its increasingly vital role as more and more companies shift their services to the cloud.

Microsoft offered to change its cloud computing practices in a deal with a few smaller competitors that would in turn suspend antitrust complaints, a person familiar with the matter told Reuters this week.

This step would prevent an investigation by the European Union.

“Microsoft certainly has a very hostile attitude to competition in the cloud. They leverage a lot of their dominance in the on-premises business as well as Office 365 and Windows to tie together Azure and the rest of the cloud services and make it difficult for customers to have a choice,” Zaffrey said in an interview late Wednesday.

“When we talk to a lot of our customers, they find a lot of these bundling practices, as well as the way they place pricing and licensing restrictions, make it difficult for them to choose other providers,” he added.

‘An unfair advantage’

Zaffrey said that individual deals with several small European cloud vendors only benefit Microsoft.

“They selectively buy into those who complain and don’t make these terms available to everyone. That certainly makes it an unfair advantage to Microsoft and ties people who complained to Microsoft anyway.”

“Whatever they offer, there has to be conditions for everyone, not just one or two people who have picked and picked, and that shows you that they have a lot of market power that they can kind of do and do these things individually.”

“My view to regulators is that they should look at this holistically, even though one or two vendors may solve the bigger problem. And that’s the problem we really need to solve, not the problems of individual vendors.”

The European Commission declined to comment.

Microsoft still faces another EU antitrust complaint from CISPE, of which Amazon is a member. The trade group rejected Microsoft’s changes.

Zaffrey dismissed the suggestion that the issue is simply a dispute between Google and Microsoft.

“The question is not about Google. I just want to make it very clear. It’s the cloud. The premise with the cloud was to have an open and flexible way to deploy your software and make customers more options so they can run their software anywhere they choose in a much easier way.”

Fu Yun Che’s report. Edited by Alexander Smith

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