Exclusive-Google steps up Microsoft criticism, warns of rival's monopoly in cloud


FILE PHOTO: Small toy figures are seen in front of Google logo in this illustration picture, April 8, 2019. REUTERS/Dado Ruvic/Illustration/File Photo

BRUSSELS (Reuters) - Alphabet's Google Cloud on Monday ramped up its criticism of Microsoft's cloud computing practices, saying its rival is seeking a monopoly that would harm the development of emerging technologies such as generative artificial intelligence.

Microsoft and Amazon have recently attracted scrutiny in Britain, the European Union and the United States over their market power in cloud computing. Google trails a distant third behind the two leaders.

Microsoft's collaboration with ChatGPT creator OpenAI has also ratcheted up the concerns.

"We worry about Microsoft wanting to flex their decade-long practices where they had a lot of monopoly on the on-premise software before and now they are trying to push that into cloud now," Google Cloud Vice President Amit Zavery said in an interview.

"So they are creating this whole walled garden, which is completely controlled and owned by Microsoft, and customers who want to do any of this stuff, you have to go to Microsoft only," he said.

"If Microsoft cloud doesn't remain open, we will have issues and long-term problems, even in next generation technologies like AI as well, because Microsoft is forcing customers to go to Azure in many ways," Zavery said, referring to Microsoft's cloud computing platform.

He urged antitrust regulators to act.

"I think regulators need to provide some kind of guidance as well as maybe regulations which prevent the way Microsoft is building the Azure cloud business, not allow your on-premise monopoly to bring it into the cloud monopoly," Zavery said.

Microsoft dismissed that argument.

"As the latest independent data shows, competition between cloud hyperscalers remains healthy," said a Microsoft spokesperson. "In 2023, Microsoft and Google made small gains on AWS, which continues to remain the global market leader by a significant margin."

Microsoft President Brad Smith on Monday took a veiled swipe at Google.

"Today, only one company is vertically integrated in a manner that includes every AI layer from chips to a thriving mobile app store," he told the Mobile World Congress in Barcelona.

Zavery also criticised Microsoft's agreements with individual cloud vendors, saying these ignore the broader issues. Trade group CISPE last month said it was in talks with Microsoft to resolve its EU antitrust complaint about its cloud computing licensing practices.

"Microsoft has been very smart, picking individual vendors who complain and do one-side deals but they don't solve the broader problem. So they can choose the winners and losers in many case as well, so they kind of pick who they want to compete with," Zavery said.

Microsoft refuted the criticism.

"We have listened to and work constructively and directly with independent cloud providers to change our licensing terms, addressing their concerns and providing more opportunity for them. Worldwide, more than 100 cloud providers have already taken advantage of these changes," a Microsoft spokesperson said.

(Reporting by Foo Yun Chee; Editing by Richard Chang)

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