Google (GOOGL) has officially filed an antitrust complaint against Microsoft (MSFT) with the European Union’s competition regulator, accusing the tech giant of unfairly using its enterprise software dominance to push businesses onto its Azure cloud platform. This move reignites a long-standing rivalry between the two companies.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 55% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Microsoft, however, isn’t backing down. According to The Wall Street Journal, the company believes that Google’s complaint will “fail to persuade the European Commission,” having previously settled similar disputes with European cloud providers. This case, though, could drag on for years, as it takes a long time for the EU to decide on complaints and potential remedies.
Google Argues Microsoft’s Licensing Practices Hurt Competition
At the heart of Google’s complaint is Microsoft’s licensing practices, which the search giant claims unfairly limit customer choice. According to Google, businesses using Windows Server face penalties when switching to competing cloud services like Google Cloud or Amazon Web Services. Google argues that since Microsoft made licensing changes in 2019, businesses have had fewer options, as their costs increase when attempting to move away from Azure.
In a press note, Amit Zavery, Google Cloud’s vice president, stated that regulatory action is “the only way to end Microsoft vendor lock-in and create a level playing field for competitors.” He believes the restrictions Microsoft imposes have worsened in recent years and locked customers into its services, leaving them with little room to explore other cloud platforms.
Microsoft Stays Unfazed by Google’s Push
Although Google’s complaint is the latest shot in the cloud competition battle, Microsoft seems confident that the complaint won’t shake things up. After all, Microsoft has already settled a similar case with a European trade group in July, agreeing to modify some licensing rules. But Google wasn’t impressed with that settlement, saying it did little to resolve the core issues. Microsoft’s dominance in enterprise software remains, and Google claims that many businesses are still stuck in vendor lock-in.
Is Google or Microsoft the Better Buy?
While Google’s regulatory battle could weigh on its stock in the short term, Microsoft’s confidence and market dominance may keep its shares steady, though ongoing scrutiny could introduce longer-term volatility for both companies.
Investors can track both stocks using TipRanks’ Stocks Comparison tool, and unsurprisingly, GOOGL stock is down 0.33%.
