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Google accuses Microsoft of anti-competitive practices in cloud: EU called to intervene

Google files complaint against Microsoft with the European Commission over “vendor lock-in” practices in cloud computing. The conflict comes amid a growing market as Google seeks to regain ground in AI by launching new Gemini models

Google accuses Microsoft of anti-competitive practices in cloud: EU called to intervene

Google (Alphabet) presented a formal complaint against Microsoft to the European Commission, accusing Redmond's rival of anti-competitive practices in the cloud computing industryThe dispute revolves around the alleged restrictions imposed by Microsoft through its licensing terms for Windows Server software and other widely used products such as Microsoft Office. According to the Mountain View company, these restrictions force customers to use Microsoft's Azure platform, severely limiting competition.

This complaint, reported by the Cnbc, highlights an issue of growing importance for the European digital economy: the Cloud Computing Market Control, dominated by three major players: Microsoft, Amazon Web Services (Aws) and Google Cloud.

What Microsoft is accused of: “vendor lock-in”

One of the central points of the accusation concerns the so-called vendor lock-in, that is, the strategy through which Microsoft would bind its customers to the exclusive use of its Azure platform. Amit Zavery, vice president of Google Cloud, explained that Microsoft forces Windows Server customers un 400% surcharge if they choose to use alternative cloud providers, such as Google or Aws. Additionally, users who opt for competing platforms would receive less timely and limited security updates than those offered to those who use Azure.

Google referred to a 2023 study conducted by the organization Cispe cloud services, (a non-profit trade association for infrastructure-as-a-service cloud providers in Europe), which found that European companies and public institutions pay up to €1 billion a year in Microsoft licensing penalties.

Microsoft's response

Microsoft is no stranger to such criticism. In July 2023, the company reached a 20 million euro agreement with Cispe for resolve an antitrust dispute regarding its licensing practices in cloud computing. An agreement that did not include giants like Google and Aws, which continued to express concerns.

Google, for its part, believes that the agreement signed by Microsoft is just a temporary solution, which does not fully address the issues related to the cloud market. “The the time to act is now“, said Zavery, stressing that the situation risks becoming increasingly restrictive if decisive regulatory measures are not adopted.

Microsoft responded by accusing Google of wanting to prolong a dispute that has already been resolved with most European providers. “Having failed to persuade European companies, we expect Google to fail with the European Commission as well,” a Microsoft spokesperson said.

The impact on the European cloud computing market

The Google-Microsoft dispute goes beyond a battle between two tech giants to the European cloud computing market, which is growing 20% ​​annually. A McKinsey study in April found that two-thirds of EU companies have less than half of their workloads in the cloud. There is plenty of room for expansion, but anti-competitive practices could hinder the development of a more competitive and open market. The European Commission, which is responsible for monitoring and protecting competition in the EU, may need to step in with tougher regulations to ensure a balance between the various players in the sector.

Google meanwhile announces the launch of Gemini 1.5

As the battle rages on in the Cloud, Google tries to catch up on the Artificial Intelligence front announcing the launch of new models of its Gemini seriesThe Gemini-1.5-Pro-002 and Gemini-1.5-Flash-002 models represent a significant improvement over previous versions, with increased performance in the fields of vision, language and mathematical calculation.

According to Google, these new models offer more concise and precise answers, reducing the length of outputs by 5% to 20% compared to previous versions. Additionally, the company announced a 64% reduction in Gemini series API costs for input tokens and 52% for output tokens, making AI more accessible for developers and enterprises.

Google then announced that from the fourth quarter of this year Gemini will be integrated into Workspace Business, Enterprise and Frontline plans, without having to purchase a separate add-on. A move that will make AI more accessible and central to the Google ecosystem for businesses.

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