2 weeks Ago By Kamya Pandey
Explainer Briefly Slides Microsoft claimed that Google has organized a group aimed at discrediting its cloud business with competition authorities in the European Union and the United Kingdom. This group is made up of a handful of European cloud providers and will launch sometime this week, Microsoft’s Deputy General Counsel, Rima Alaily, said in a blog post . She elaborated on the composition of the group and how it would serve Google.
“Google has gone to great lengths to obfuscate its involvement, funding, and control, most notably by recruiting a handful of European cloud providers, to serve as the public face of the new organization. When the group launches, Google, we understand, will likely present itself as a backseat member rather than its leader. It remains to be seen what Google offered smaller companies to join, either in terms of cash or discounts,” the blog post read.
Google is also lobbying against other hyperscale cloud service providers across the world, Alaily said. She mentioned that Google claims that regulators shouldn’t treat it as a hyper scale cloud service provider (like Microsoft or Amazon Web Services). “This strains credibility.
Google may have been late in meeting the needs of enterprise customers, but it is fully capable of competing head-to-head with AWS and Microsoft,” she added. Google’s previous push against Microsoft’s cloud services: In November 2022 , the non-profit Cloud Infrastructure Service Providers in Europe (CISPE) had filed a competition complaint against Microsoft with the European Commission. This complaint focused on unfair software licensing for cloud infrastructure providers and their customers in Europe.
Specifically, CISPE flagged that Microsoft was using its dominance in the cloud market in Europe to direct customers to its own Azure cloud infrastructure. In July this year, when Microsoft and CISPE were on the verge of resolving this complaint, Google tried to “weaponise” CISPE against Microsoft, Alaily’s blog post said. She alleged that Google offered CISPE’s members a combination of cash and credits worth $500 million to not settle with Microsoft and continue pursuing litigation.
Further, in September this year , Google filed a complaint against Microsoft’s cloud services in the EU. Alaily noted that companies typically submit such complaints confidentially but Google instead broadcasted its concerns. Instead of featuring consumer-centric concerns, she argued, Google’s complaint said that it should “not have to pay Microsoft when it builds and offers cloud services” using Microsoft’s intellectual property (the Windows Server).
” We disagree [with Google’s complaint].When a streaming service, like Netflix or Disney, includes a movie in their service, they pay for that right. They don’t get a credit or discount if a subscriber happens to own a DVD of the same movie.
Software and the cloud are no different,” she explained. The timing of Google’s complaint and alleged lobbying: She drew attention to the fact that both the lobbying group and Google’s antitrust complaint come in the backdrop of at least 24 antitrust investigations against Google in digital markets across the world. As such, the company believed that Google is trying to accomplish two goals through its alleged lobbying efforts: The company added that Google is funding–directly and indirectly–various industry commentators and academics to attack Microsoft and author “studies” that competitors can cite.
“Europe is not the only jurisdiction where Google is engaged in these tactics, nor is software licensing for the cloud the only topic Google is using to attack us behind the scenes,” Alaily explained. She added that in the US Google is a key funder for the Coalition for Fair Software Licensing which is attacking Microsoft’s cloud services in the US, the UK, and the EU. The ongoing investigation into Microsoft’s cloud services: In June this year , the UK’s Competition and Markets Authority (CMA) released a working paper on the investigation into Microsoft’s market power in the cloud services market and the potential impact of its licensing practices on competition.
The paper suggests that Microsoft has “significant market power in cloud services compared to other software providers.” The CMA spoke to Microsoft customers and found that it is easier for them to use Microsoft software products on Azure than on any other cloud provider’s service. During the evidence-gathering process for this working paper, one cloud service provider told CMA that Microsoft’s strategy of combining its productivity applications with unrelated products, along with its competitive pricing approaches, makes it difficult for new companies to successfully enter and compete in the productivity software market.
Also read:.
