When Google publicly accused Microsoft of locking business users into using its Azure cloud platform last month, something stood out as unusual.
Microsoft’s licensing terms, Google said in a blogpost on its website, make it impossible for customers to move “their current Microsoft workloads to competitors’ clouds – despite there being no technical barriers to doing so”.
The blogpost went on to detail the damage these self-preferencing practices had done to … European businesses and governments. “To seek a resolution that will benefit everyone, we are now taking the next step of filing a formal complaint with the European Commission,” the California-headquartered company said.
But both Google and Microsoft are U.S. companies. Why file the complaint in Europe?
Pointing out that Google has been the target of over 100 competition cases around the globe, Thomas Höppner, a Berlin-based competition partner at the German independent firm Hausfeld, said Google’s legal team likely understood which legal system and enforcement authority was most capable of taking on abuses of dominance.
“The fact that after 15 years of legal battles with the European Commission, Google is turning to the [Commission] with its own complaint against Microsoft, suggests that it views the Commission as the strongest enforcement authority in the digital sphere.” Hausfeld has advised complainants in cases against Google in the past.
This was echoed by a Brussels-based competition lawyer, who added: “Big Tech guys, they hate Europe for what Europe is doing to some extent, but their fights are here in Europe.” The lawyer, whose firm has advised Microsoft in the past, added he believed the EU’s competition wing was “stupid” to accept such complaints from U.S. companies. “We should send these guys back to the United States and say—deal with your problems in the United States. Because we spend a lot of time in Europe [on] these fights amongst Big Tech.”
A spokesperson for the European Commission said it does not “comment on comments”.
In 2020, Slack, the U.S. company behind the popular messaging platform of the same name, also filed a competition complaint before the European Commission against Microsoft, asking the powerful regulator to intervene as a “neutral referee”.
It is difficult to say how many complaints have been filed by U.S. large tech companies against competitors before the EU’s antitrust authorities, but the Google complaint appears to be the most high-profile public complaint filed to date. Some antitrust grievances do not make it into a formal EU antitrust complaint; others do but the identity of the complainants does not become public. “The big firms appear to prefer hiding behind associations or to not attack each other,” said Höppner, adding that U.S. cloud company Oracle was behind a 2013 EU antitrust complaint filed over Google’s Android mobile operating system.
Google has likely opted to go public with its complaint to pressure Microsoft into concessions, the lawyer who has advised Microsoft in the past said. “They may have talked to each other, they don’t get anywhere; they raise the stakes a bit by going public,” he said, pointing out that Microsoft would want to avoid a protracted EU antitrust investigation. In the 2000s and early 2010s, Microsoft racked up €2.2 billion in EU antitrust fines.
Fiona Scott Morton, an economics professor at Yale University, told Law.com International that taking an antitrust concern to the EU rather than filing a legal challenge before the U.S. court was more appealing for reasons of speed and described it as a “longstanding tactic” by U.S. companies. “If you are one of these medium or smaller companies, or large ones for that matter, and you want to launch a product right away, the antitrust case process in the United States is a poor approach because it will take too long,” she said. “Your product will be obsolete and long gone by the time you get any progress by the government. So, it’s better to go to Europe where there’s a regulator.”
Law.com International reached out to several firms that have advised Google on competition matters in the past. They declined to comment. Google and Microsoft did not respond to requests for comment.