The issue of Microsoft’s licensing practices has been under scrutiny for some time, in July 2023, Microsoft settled a separate antitrust complaint with CISPE for €20 million ($21.7 million)
Google has filed an antitrust complaint against Microsoft with the European Commission, accusing the company of unfair cloud licensing practices that restrict customer choice. The complaint, submitted on September 25, argues that Microsoft’s policies push customers towards its own Azure platform, effectively locking them out of alternative cloud providers.
Amit Zavery, Vice President of Google Cloud, explained that Microsoft’s licensing rules, updated in 2019, force customers to pay up to 400% more if they want to run Windows Server on rival cloud platforms. This, he said, severely limits competition in the cloud market. “We would like the cloud market to remain vibrant and open for all providers,” Zavery stated. He noted that the restrictions are not due to technical limitations but rather Microsoft’s policies, adding that “the best technology and commercial offers should win the market based on customer needs.”
Zavery referred to a 2023 study by the Cloud Infrastructure Services Providers in Europe (CISPE), which found that European businesses and public sector bodies are collectively paying up to $1.12 billion annually in Microsoft licensing penalties. The updated terms from Microsoft began in October 2019, when the company changed its licensing rules for dedicated hosted cloud services.
The issue of Microsoft’s licensing practices has been under scrutiny for some time. In July 2023, Microsoft settled a separate antitrust complaint with CISPE for €20 million ($21.7 million). As part of that settlement, Microsoft agreed to create a new product, Azure Stack HCI, which would allow European cloud providers to run Microsoft software at prices equivalent to what Microsoft itself charges.
However, Zavery believes this resolution did not bring about meaningful change. “If you look at the details around the CISPE settlement, it’s not solving any problem,” he said. He argued that customers still lack the freedom to run their Windows licenses on platforms like Google Cloud, Amazon Web Services (AWS), or other European cloud providers.
Meanwhile, regulatory interest in cloud computing practices continues to grow. In the UK, the Competition and Markets Authority (CMA) launched an investigation into the cloud computing market in October 2023, extending its deadline last week to further explore licensing issues, including those related to Microsoft.
Zavery categorically denied recent reports suggesting Google offered CISPE €14 million ($15.3 million) in cash and €455 million ($497.5 million) in software licenses to support its ongoing antitrust probe into Microsoft. Despite these allegations, Zavery insists that the core problem—unfair licensing restrictions—remains unresolved. Both Google and AWS have voiced concerns over Microsoft’s practices during hearings with the CMA, calling for a fairer and more open cloud market.
