Google has lodged an antitrust complaint against Microsoft with the European Union.

Google is accusing Microsoft of using its dominant position in business software to unfairly lock clients into its Azure cloud services. 

The complaint, which could prompt an investigation by the European Commission, centres on claims that Microsoft's cloud licensing practices are harming competition and driving up costs for European businesses.

Google argues that Microsoft has been leveraging its strength in business software, particularly Windows Server, to impose punitive fees on customers who seek to move their cloud-based projects away from Azure. 

According to Google, European companies are losing more than €1 billion annually due to these practices, which also stifle competition in the fast-growing cloud services market.

“Microsoft has created unfair barriers that prevent customers from choosing alternative cloud providers, limiting competition in Europe’s cloud services market,” Google said in a blog post. 

Amit Zavery, vice president at Google Cloud, added that Microsoft customers pay up to a 400 per cent mark-up to run Windows Server on competing platforms, but face no such costs if they remain on Azure. 

Additionally, security updates for those opting for other cloud providers are often delayed and limited in scope, further incentivising businesses to stick with Microsoft’s services.

This complaint is the latest escalation in the longstanding rivalry between Google and Microsoft, with both companies repeatedly accusing each other of monopolistic practices over the years. 

While Google dominates the web search market, Microsoft has a larger presence in business software and cloud computing, particularly with its Azure platform and Office suite. 

The cloud sector has become a major battleground, with Microsoft and Amazon’s AWS leading the market, and Google struggling to catch up.

The move also comes as Microsoft is already under scrutiny from European regulators. 

Microsoft’s bundling of its Teams collaboration software with other business products is the subject of a separate antitrust investigation following a 2020 complaint from Slack, a competitor owned by Salesforce. Microsoft is also facing a related inquiry by the UK’s Competition and Markets Authority.

In response to Google’s filing, Microsoft pointed to a recent agreement with European cloud providers, where it settled similar concerns raised by smaller competitors. 

“Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission,” Microsoft said in a statement