This article first appeared on GuruFocus.
Google (NASDAQ:GOOG) is backing off its legal fight with Microsoft in Europe, just as regulators move in with a much broader crackdown on the cloud industry.
Google had accused Microsoft (NASDAQ:MSFT) last year of unfair practices around its Azure cloud business. But now the European Commission has stepped in with its own investigation under the Digital Markets Act, widening the focus to include both Microsoft and Amazon (NASDAQ:AMZN). With regulators now taking the lead, Google has dropped its complaint.
The probe is aimed at figuring out whether cloud giants like Microsoft and Amazon wield so much power that they should be labeled gatekeepers, even if they technically fall short of the law’s size thresholds. Regulators will also look closely at whether customers can easily move their data between cloud services, whether products are being bundled in unfair ways, and if business contracts tilt too heavily in favor of providers.
Together, Amazon, Microsoft, and Google control about 70% of Europe’s cloud market. the cloud battle just shifted from boardrooms to Brussels. Google stepped aside, but Europe just turned up the heat.