Google (NASDAQ: GOOG) has filed a formal antitrust complaint with the European Commission, accusing Microsoft of anti-competitive behavior in the cloud computing market. The complaint alleges that Microsoft leverages its dominant Windows Server operating system to restrict customer choices and favor its Azure platform through excessive licensing fees and limited security updates for competitors.

This move marks another chapter in the long-running rivalry between two of the world’s leading cloud providers.

Notably, this complaint comes amid heightened regulatory scrutiny of U.S. tech companies by European authorities. Over the past decade, the EU has gained a reputation for imposing stringent rules on companies like Google, Microsoft, Facebook, and Amazon, aiming to curtail monopolistic practices and ensure a level playing field.

It is intriguing that the U.S. tech giant is now appealing to the very regulatory bodies that have traditionally been tough on their market behavior.

Why It Matters: The case reflects the growing complexity of competition in the cloud sector, where major U.S. firms vie for control of a rapidly expanding market. At the same time, it underscores the paradox of tech companies turning to the European Union’s regulatory framework, known for its stringent stance against them, as they seek redress against their rivals. This development could lead to new legal precedents in the regulation of cloud services.

• Tough EU Stance on U.S. Tech: European regulators have long been stringent on U.S. tech companies, imposing significant fines and rules aimed at curbing monopolistic behavior. Both Google and Microsoft have faced multi-billion-dollar fines from the European Commission in past cases related to unfair business practices.

• Appealing to the Same Regulator: It is notable that Google, once a frequent target of EU antitrust actions, is now leveraging the same system to challenge Microsoft. This irony highlights how Europe’s strict regulatory environment is increasingly being used as a battleground by competitors to address market dominance and anti-competitive practices.

• Cloud Market Impact: Google’s complaint focuses on Microsoft’s alleged use of licensing tactics to lock customers into its Azure platform, preventing them from using other cloud providers like Google Cloud or Amazon Web Services (AWS). Google claims this harms market competition and costs European businesses up to €1 billion annually in licensing penalties.

• Past Antitrust Actions: European regulators have previously taken significant actions against both companies. Microsoft, for example, has been fined several times over the last two decades for bundling its software unfairly. Similarly, Google was fined €4.34 billion in 2018 for abusing its dominance in the Android market. These precedents suggest that the EU could once again intervene with regulatory actions.

• Potential Long-Term Consequences: If the European Commission takes up the case, Microsoft could face new restrictions on how it licenses its software across Europe. This could reshape the dynamics of the cloud computing sector, especially for businesses seeking to migrate to multi-cloud environments.

Go Deeper -> Google complains to EU over Microsoft cloud practices – Reuters