Google LLC has announced that it has filed an antitrust complaint against Microsoft Corp. with the European Commission, the European Union’s executive arm.

The move has to do with Windows Server. According to Google, a set of licensing terms that Microsoft applied to the operating system in 2019 harmed competition and raised costs for customers.

Windows Server is a version of Windows optimized for use in data centers. It includes system management and security features not included in the consumer version of the operating system. There are also capabilities geared toward cloud environments, such as a hotpatching tool that can install Windows updates in Azure instances without rebooting them.

Google’s antitrust complaint focuses on a licensing change that Microsoft rolled out to Windows Server in 2019. Under the revised usage terms, customers must pay additional fees if they wish to move their Windows Server licenses from Azure to rival platforms such as Google Cloud. According to the Alphabet Inc. unit, past statements from Microsoft indicate that those fees can increase the cost of running the operating system on rival clouds by 400% in some cases.

The search giant’s complaint flags other issues as well. According to Google, companies that wish to run Windows Server on third-party cloud platforms have more limited access to security patches than Azure users. The search giant argues that there are also “other interoperability barriers.”

“As cloud computing took off and promised to bring new benefits to European businesses, customers wanted to move their previously purchased licenses to other cloud providers, and in some cases to multiple clouds, to provide additional resiliency and security,” Google Cloud executives Amit Zavery and Tara Brady wrote in a blog post. “Initially, Microsoft allowed them to do this. But as Azure faced more competition, Microsoft introduced new rules that severely limited customer choice.”

Google’s antitrust push comes about two years after CISPE, a trade association that represents two dozen cloud providers in the EU, filed a similar complaint. The consortium accused Microsoft of imposing “self-preferencing pricing and technical and economic lock-in” on customers.

CISPE withdrew its complaint earlier this year after reaching an agreement with Microsoft. As part of the deal, the company agreed to develop a product that will make it easier for cloud providers to deploy its software in their data centers. Additionally, Microsoft will reportedly pay CISPE $22 million to compensate its members for certain licensing costs and cover a number of other expenses.

“Microsoft settled amicably similar concerns raised by European cloud providers, even after Google hoped they would keep litigating,” Microsoft said in a statement. “Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission.”

Antitrust complaints sent to the European Commission don’t necessarily lead to regulatory action. If the commission decides to launch an antitrust probe, as it did following Slack’s 2020 antitrust complaint against Microsoft, a decision could take years to finalize. The EU can issue fines over business practices that are found to breach competition law and order them to be changed.

Microsoft has blamed EU rules for enabling a faulty security update to cause the world’s biggest IT outage.

The software giant said a 2009 agreement with the European Commission meant it was unable to make security changes that would have blocked the CrowdStrike update that triggered widespread travel and healthcare chaos on Friday.
CrowdStrike’s Falcon system, designed to prevent cyber attacks, has privileged access to a key part of a computer known as the kernel.

This meant that a faulty update last week resulted in millions of Windows computers and servers being unable to load at all, leading to flight cancellations, contactless payments not working and GP surgeries being unable to make appointments.

Microsoft, which offers its own alternative to CrowdStrike known as Windows Defender, agreed in 2009 to allow multiple security providers to install software at the kernel level amid a European competition investigation.

In contrast, Apple blocked access to the kernel on its Mac computers in 2020, which it said would improve security and reliability.

A Microsoft spokesman told the Wall Street Journal that it was unable to make a similar change because of the EU agreement.

Microsoft said on Saturday that the CrowdStrike update had affected 8.5m Windows devices. This was less than 1% of all machines operating the software, but had major impacts because CrowdStrike is widely used in businesses.

The faulty update caused a blue error screen on many computer screens, rendering them unusable until they were fixed. CrowdStrike said on Monday that “a significant number” of the affected computers were back online and apologised for the disruption.

Figures from data company OAG showed that 9,650 flights had been cancelled between Friday and Sunday. While many airlines had recovered, 2,619 flights were cancelled on Sunday, with US airline Delta accounting for most of those.

The NHS said that its systems were back online but that “there still may be some delays as services recover”.

The European Commission pursued Microsoft in the early 2000s over concerns that the company’s popular Windows software gave it an unfair advantage in other areas such as web browsers.

In 2009 the company agreed to boost choice for computer users in browsers and other software.

It comes as new European laws are forcing Apple to open up its iPhone. Under the new Digital Markets Act, the company will have to allow alternative app stores and web browser engines on the iPhone.

Apple has claimed the changes will make the iPhone less safe.

Google offered European cloud firms a $512 million package to stop CISPE from settling its antitrust case against Microsoft, just days before the deal was announced.

According to documents seen by Bloomberg, the package included around $15 million in cash, as well as roughly $495 million worth of software licenses for Google’s cloud products over the next five years.

The deal was intended to lock the group into continuing their legal challenge against Microsoft, but appears the members opted against Google’s lucrative offer in favor of a series of concessions made by Microsoft.

The Cloud Infrastructure Services Providers in Europe (CISPE), a non-profit trade association for cloud providers, had originally lodged a complaint with the EU’s antitrust branch accusing Microsoft of anticompetitive software licensing practices.

The case alleged that Microsoft had acted illegally by making it harder for customers to change their cloud providers by tying its business software to its Azure cloud services platform.

Google was not alone in its attempts to try and derail the settlement. AWS is reported to have made around $6.5 million in financial contributions to the proposal.

When asked about its attempt to stymie Microsoft’s settlement, a spokesperson for Google Cloud said:

Microsoft has agreed to settle an antitrust complaint with the European cloud services organisation CISPE. The deal will see the big tech firm pay out €20m in exchange for the trade body withdrawing its complaint to the European Commission, which claimed that Microsoft manipulated licensing agreements for its software to prevent its cloud computing customers from switching to other providers. It will also reset the pricing of its software and remunerate CISPE’s 27 members for revenues lost because of the big tech firm’s conduct – with the exception of AWS, AliCloud and Google Cloud.

The agreement will likely forestall an EU antitrust investigation and any potential financial penalties that arise from such a probe. Microsoft’s president and vice-chair Brad Smith applauded the deal. “After working with CISPE and its European members for more than a year, I am pleased that we’ve not only resolved their concerns of the past,” said Smith, “but also worked together to define a path forward that brings even more competition to the cloud computing market in Europe and beyond.”