Alphabet (GOOGL)-owned Google has ditched its EU antitrust complaint against tech rival Microsoft’s (MSFT) cloud services declaring, that it is now up to politicians to curb its power in the sector.
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Customers Are Locked In
The complaint, launched last September, alleged that Microsoft’s anti-competitive practices locked customers into Microsoft’s cloud platform Azure.
It also accused Microsoft of hiking prices for its software by up to 400% for customers who used rival cloud providers. Amazon (AMZN) leads the cloud computing market with a 30% share, followed by Microsoft at 20% and Google at 13%.
However, last week’s move by EU regulators to launch an investigation into whether U.S. tech giants Microsoft and Amazon are cloud computing ‘gatekeepers’ under its Digital Markets Act, has led to a change in Google’s strategy.
“Today, we are withdrawing it (Microsoft complaint) in light of the recent announcement that the EC will assess problematic practices affecting the cloud sector under a separate process,” Giorgia Abeltino, senior director for Google Cloud Europe, said in a blog post. “We continue to work with policymakers, customers, and regulators across the EU, the UK, and elsewhere to advocate for choice and openness in the cloud market.”
Fines Could Be Levied
The Commission, which acts as the EU competition enforcer, is investigating whether certain features of the cloud sector may be reinforcing Microsoft Azure and Amazon Web Services’ market power.
Should the Commission conclude, after a 12-month investigation, that Microsoft and Amazon meet the criteria to be designated as gatekeepers for their cloud computing services under the DMA, Amazon and Microsoft would have six months to ensure full compliance.
Companies labeled as gatekeepers will be required to make their services interoperate with rivals and are not allowed to favor their own services over rivals. Companies can be fined up to 10% of annual global turnover for DMA violations.
The probe comes as tensions between Europe and President Trump remain elevated over the future of digital technology, AI and the power of U.S. firms delivering these services on the continent.
That matters for companies like Google, which has a strong revenue exposure to Europe – see above.
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