Google Drops EU Antitrust Bomb on Microsoft Cloud—Just as EU Steps In

Google just pulled a surprise pivot in the cutthroat cloud wars, withdrawing its long-standing antitrust complaint against Microsoft over Azure practices—barely a week after EU regulators launched their own sweeping probe into the sector. Alphabet Inc.’s  Google Cloud Europe head Giorgia Abeltino announced the move Friday, citing the European Commission’s fresh investigation under the Digital Markets Act (DMA) as covering the same ground. “Today, we are withdrawing it in light of the recent announcement that the EC will assess problematic practices affecting the cloud sector under a separate process,” she wrote in a blog post.​

This was no small grievance. Google filed the complaint last year, its first-ever formal antitrust action against Microsoft, accusing the software giant of anti-competitive tactics that trapped customers in Azure through punishing licensing terms. Specifically, Google Cloud VP Amit Zavery highlighted how Microsoft slapped a 400% markup on Windows Server licenses for rival clouds, while Azure users got them free or deeply discounted. Customers switching providers also faced restricted access to critical security patches and interoperability headaches, effectively building a “lock-in” moat around Microsoft’s ecosystem.​

The Original Beef: Microsoft’s “Tax” on Cloud Rivals

Picture this: You’re a business running Windows workloads and want to move from Azure to Google Cloud or AWS. Microsoft doesn’t just let you go—they hit you with sky-high licensing fees that make staying put the only sane option. Google argued this wasn’t competition; it was coercion. “We filed our antitrust complaint… to give voice to our customers and partners about the issue of anticompetitive cloud licensing practices,” Abeltino emphasized, standing by the original claims even in retreat.

Microsoft’s dominance stems from its Windows Server ubiquity—millions of enterprises rely on it. By tying cloud discounts to Azure exclusivity, Redmond creates a financial barrier rivals can’t match. EU docs from Google’s filing detailed real-world pain: firms paying premiums or rewriting apps to escape. This echoes past battles, like Microsoft’s EU fines for browser bundling, but cloud stakes are higher with trillions in projected spend.​

EU’s DMA Probe: Broader Net Catches Azure and AWS

Timing is everything. Just days before Google’s withdrawal, the European Commission opened formal DMA investigations into Microsoft Azure and Amazon Web Services , questioning if they qualify as “gatekeepers” despite not hitting traditional thresholds. The DMA—EU’s landmark 2022 law—imposes ex-ante rules on dominant platforms: data portability, fair terms, no self-preferencing.

Google sees this as validation. The probe examines cloud contracts, tying practices, and switching barriers—precisely Google’s gripes. “We continue to work with policymakers… to advocate for choice and openness,” Abeltino added, signaling they’ll feed intel into the DMA process without their standalone complaint. Microsoft declined comment; a Commission spokesperson noted the withdrawal but vowed ongoing antitrust monitoring.​

Amazon’s in the crosshairs too, with probes into AWS bundling and data use. Together, the “Big Three” (Microsoft ~32%, AWS ~31%, Google ~11% in Europe) control 70%+ market share. Critics say DMA could force unbundling, like mandatory license neutrality.​

Billions at Stake in Hyperscaler Battle

Cloud computing is the new oil—global spend hits $1 trillion by 2030. Microsoft’s Azure grew 30% YoY, chasing AWS’s lead, while Google Cloud lags but gains on AI prowess. Accusations fly both ways: Microsoft has griped about Google’s ad tech; now Google steps back, betting regulators handle it.

This truce-like move avoids escalation amid U.S.-EU tensions. Trump’s reelection eases some transatlantic friction, but DMA enforcement ramps up. Analysts see Google’s play as strategic: amplify via official channels, dodge “hypocrite” labels since Alphabet faces its own EU scrutiny.​

Real Pain Behind the Legal Jousting

Enterprises cheer potential relief. A mid-sized EU retailer told Reuters switching clouds cost 3x expected due to Windows penalties—rewrites ate margins. Healthcare firms fear data silos; multicloud strategies crumble under fees. Open Cloud Coalition (backing Google) pushes “license mobility” globally.​

Post-DMA, expect mandates: portable workloads, transparent pricing. But complexity looms—cloud isn’t plug-and-play; refactoring costs billions. Winners? Neutral brokers like Snowflake  or Databricks.

DMA Timeline and Market Shifts

EU probes wrap in months; gatekeeper designation triggers compliance deadlines (6 months). Non-compliance? Fines up to 10% global revenue—eye-watering for Microsoft ($245B FY25). Early signs: Azure tweaks licensing previews.

Google’s withdrawal streamlines focus—no parallel fights muddying DMA. They’ll submit evidence, lobby via UK/EU channels. Microsoft may counter with interoperability proofs; AWS watches warily.​

Click Here to subscribe to our newsletters and get the latest updates directly to your inbox