Google's Complaint Against Microsoft Highlights Cloud Industry Competition

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Complaint

In the cutthroat world of business, companies often aim to strike their rivals where it hurts the most. As Microsoft faces challenges in gaining approval for its acquisition of Activision-Blizzard, Google saw an opportune moment to deliver a potential knockout punch to Microsoft's Azure division, a direct competitor to its own Google Cloud division.

Background

In March 2022, the Federal Trade Commission (FTC) called for businesses to provide input on the business practices of major cloud providers such as Google Cloud, Microsoft Azure, and Amazon AWS. Recently, Google responded to this call by leveling accusations against Microsoft and Oracle, alleging unfair practices in the cloud industry, CNBC reports.

Google's Complaint Against Microsoft

Within its complaint, Google specifically targeted Microsoft, claiming that the company, through its dominant Windows Server and Microsoft Office products, creates barriers for clients to explore alternatives to its Azure cloud infrastructure offering. Google referred to Microsoft's licensing restrictions as a "complex web" that makes it difficult for businesses to diversify their enterprise software vendors.


National Security and Cybersecurity Concerns

Google aimed to undermine Microsoft's reputation by emphasizing the SolarWinds incident, suggesting that Microsoft's control over client infrastructure presents grave national security and cybersecurity risks. However, it's important to note that both Microsoft and Google, as major enterprises, actively maintain robust cybersecurity practices to mitigate and investigate such threats.

Additional Allegations by Google

In its letter to the FTC, Google also dragged Oracle into the mix and claimed that both Microsoft and Oracle use overly complex agreements to lock customers into their ecosystems, limiting choice, increasing costs, and disrupting thriving digital ecosystems in the United States and globally.

Google's Antitrust Issues

While Google raises valid concerns in its accusations, it is worth noting that the company itself has faced scrutiny in various antitrust lawsuits. In the United States, the Department of Justice filed a lawsuit in September 2020, accusing Google of leveraging its monopoly power to stifle competition in internet search through exclusionary agreements. A separate lawsuit targeting Google's ad business for similar anti-competitive tactics followed shortly after. Moreover, it does have complex licensing agreements around its Android Operating System that has been thoroughly documented.

Considerations

It is essential to acknowledge Google's past actions, such as its refusal to develop apps like YouTube and Google Search for Microsoft's ill-fated Windows Mobile platform, which significantly impacted Microsoft's mobile efforts. In the cloud industry, Amazon's AWS remains the undisputed champion, with Azure following at a distance. While businesses naturally aim to retain customers, it should be done within reasonable boundaries. The long-term effects of Google's allegations on Microsoft's ongoing battles remain uncertain.

Conclusion

As Google takes aim at Microsoft's practices in its complaint to the FTC, the cloud industry's fierce competition is brought into the spotlight. Both Google and Microsoft have their share of antitrust controversies, emphasizing the complex dynamics at play. Ultimately, time will tell the extent to which Google's allegations impact Microsoft's ongoing battles within the cloud industry.


Sources:

CNBC

FTC

SolarWinds Hack

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