Microsoft is facing a £1 billion lawsuit in the United Kingdom over claims of anti-competitive pricing practices in its cloud computing services. The lawsuit, spearheaded by competition lawyer Maria Luisa Stasi, accuses the tech giant of unfairly overcharging businesses that use rival cloud platforms like Amazon Web Services (AWS), Google Cloud, and Alibaba Cloud to host its widely used Windows Server software.

The case alleges that Microsoft offers significantly cheaper licensing fees for Windows Server software hosted on its own Azure cloud platform while charging higher fees for the same software on competitors’ platforms. This practice, according to the lawsuit, effectively penalizes businesses that opt for alternative cloud solutions and restricts competition in the industry.

“Put simply, Microsoft is punishing UK businesses and organisations for using Google, Amazon, and Alibaba for cloud computing by forcing them to pay more money for Windows Server,” Stasi stated.

“By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.”

The legal action represents thousands of UK businesses and organizations, with Stasi emphasizing the lawsuit’s goal to expose the scale of the alleged overcharges and seek compensation for affected parties.

Regulatory Scrutiny Intensifies

The lawsuit comes as the UK’s Competition and Markets Authority (CMA) ramps up its investigation into anti-competitive practices in the cloud computing sector. The CMA is expected to issue a provisional decision on the matter by December 2024.

This is not Microsoft’s first run-in with such allegations. In March 2024, the company settled a €20 million antitrust complaint with CISPE, a European cloud trade body, by agreeing to standardize pricing across smaller cloud providers and its own Azure platform.

However, fresh challenges have emerged, with Google filing a new antitrust complaint with the European Commission in September, accusing Microsoft of restricting customers’ ability to switch platforms.

A Shifting Cloud Market

The broader cloud computing industry has witnessed remarkable growth, but European providers have struggled to compete with dominant US firms like Microsoft. According to Synergy Research Group, European cloud firms’ market share declined from 27% in 2017 to just 13% in 2022.

Solange Viegas Dos Reis, chief legal officer at French cloud provider OVHCloud, echoed concerns about the dominance of hyperscalers like Microsoft, which bundle software and infrastructure, making it difficult for third-party platforms to compete. OVHCloud itself resolved an antitrust complaint with Microsoft in July 2024.

With this lawsuit, Stasi and the affected UK businesses aim to highlight the broader implications of Microsoft’s practices, advocating for fair competition and transparency in the rapidly evolving cloud computing sector. Microsoft has yet to comment on the lawsuit.

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Google Cloud has declared a waiver of fees for customers migrating their data to other cloud providers. This initiative, available globally to all Google Cloud customers, aims to empower businesses by providing a transparent, cost-free option for transitioning to the cloud platform that best suits their needs.

Amit Zavery, the General Manager, Vice President, and Head of Platform at Google Cloud, highlighted concerns about restrictive licensing practices from legacy providers.

Zavery criticized these practices for limiting customer choice, inflating costs, and impeding data portability to alternative cloud platforms.

The primary goal of Google Cloud’s fee elimination is to remove a significant barrier to cloud migration.

The company emphasized building an open, secure, and interoperable cloud ecosystem, encouraging businesses to make decisions based on merit rather than being constrained by hidden costs or vendor lock-in.

However, Google Cloud acknowledged that free data transfer alone is not sufficient. The company called for broader industry action against restrictive licensing practices, urging for stricter regulations and greater transparency in cloud service provider contracts.

Zavery’s message resonates with the broader tech community, emphasizing that customer freedom and a level playing field are critical for shaping the future of the cloud.

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TECH DIGEST- Google has announced the establishment of its first cloud region in South Africa, catching up to other leading providers such as Amazon Web Services (AWS) and Microsoft Azure, which made inroads into the continent a few years ago. Google has stated that it is constructing Dedicated Cloud Interconnect locations in Nairobi (Kenya), Lagos (Nigeria), and South Africa (Cape town and Johannesburg) in order to deliver full-scale cloud capabilities to its clients and partners in Africa.

Google plans to tap its private subsea cable, Equiano, which connects Africa and Europe to power the sites. Equiano has been under development since 2019 and has so far made four landings — in Togo, Namibia, Nigeria, and South Africa. With the recent preview launches of regions in Malaysia, Thailand, and New Zealand, South Africa has now joined Google’s global network of 35 cloud regions and 106 zones. Users can deploy cloud resources from particular geographic locations using Google Cloud regions, and they can also use a number of services like cloud storage, computation power, and key management system.

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“We are excited to announce the first Google Cloud region in Africa. The new region will allow for the localization of applications and services. It will make it really easier for our customers and partners to quickly deploy solutions for their businesses, whereby they’re able to leverage our computer artificial intelligence or machine learning capabilities, and data analytics to make smarter business decisions as they go forward,” said Google Cloud Africa director, Niral Patel.

He added that the new region and interconnect sites will take its cloud computing services closer to its clients, allowing its customers to choose where to consume the products from. “What we’re doing here is giving customers and partners a choice on where they’d like to store their data and where they’d like to consume cloud services, especially in the context of data sovereignty. This allows customers to then store the data in the country should they choose to do so… I guess for me the most important element is that it gives customers the element of choice,” Patel said.

The ability for users to choose where they store their data is increasingly critical as countries like Kenya implement privacy and data laws, which require companies to store their data within borders and process it through servers hosted locally.

The decision to set up a region in South Africa was informed by the demand for cloud services and the market’s potential. Still, the company is looking to launch in more markets within the continent as demand for its products soars. Its early adopters include large enterprise companies, and e-commerce firms like South Africa’s Take a lot and Kenya’s Twiga.

“We continue to evaluate market demands as we work with our customers to see them transform and grow in these markets. We continuously make these assessments, and it is on that basis, that we continue to invest,” Patel said. According to research by AlphaBeta Economics, commissioned by Google Cloud, the South Africa cloud region will contribute over $2.1 billion to South Africa’s GDP and support the creation of more than 40,000 jobs by 2030.

With the introduction of Google, South Africa is now home to four of the continent’s top cloud storage providers.

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TECHDIGEST – Google Cloud is recruiting a team to build tools for developers working on web3 products and services. The new group will aim to capitalise on opportunities presented by the growing interest in blockchain-based apps as Google looks to get ahead of its public cloud rivals, Amazon’s AWS and Microsoft Azure, in another emerging technology area.

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By establishing the web3 unit, the company aims to make its Google Cloud Platform the number one choice for developers in the field, according to an internal email that Amit Zavery, a vice president at Google Cloud, sent to staff on Friday. In the email, seen by CNBC, Zavery said: “While the world is still early in its embrace of web3, it is a market that is already demonstrating tremendous potential with many customers asking us to increase our support for web3 and crypto-related technologies.”

Headed by James Tromans, an executive who has been with Google since 2019, the new team will offer back-end tools to developers working on their own web3 projects. “We’re not trying to be part of that cryptocurrency wave directly,” Zavery said in an interview with CNBC. “We’re providing technologies for companies to use and take advantage of the distributed nature of web3 in their current businesses and enterprises.”

Web3 is the idea that the next generation of the internet will be built on distributed blockchain technology where users have more control over their information. This is often contrasted to web 2.0, the era in which online data has become centralised with a small group of tech firms, including Google and Amazon.

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