Microsoft has claimed that rivals Amazon Web Services (AWS) and Google are 'muddying the waters' of the antitrust investigation currently underway by the UK Competitions and Markets Authority (CMA).

The cloud giant has released three responses to the CMA's June working papers, which were first reported by Computer Weekly.

The CMA's June 2024 working papers suggested that Microsoft's licensing practices could be weakening competition in the UK by making it more expensive for customers to use Microsoft licenses in other clouds, and making customer demand "less contestable to rivals."

As part of the investigation, those being looked into were given the opportunity to offer feedback on the findings.

Google reiterated the criticism of Microsoft in its six-page response.

"We believe Microsoft’s licensing practices both raise rivals’ costs and weaken rivals’ ability to compete for a significant proportion of customer demand and as a result constitute a clear AEC," the response said.

Google added that Microsoft's licensing practices relate to software that enjoys "significant market power," and along with "artificial restrictions," make those products significantly more expensive to be used along with a competitor's cloud.

The response goes on to argue: "Microsoft’s rivals cannot counteract these significant price differences and artificial restrictions and the significant price differences and artificial restrictions materially disadvantage Azure’s main rivals and prevent them from competing effectively for a significant portion of the contestable demand."

A Google Cloud spokesperson told DCD via email: “The cloud is helping power the digital economy in the UK, but restrictive licensing continues to limit customer choice and innovation. We will continue to advocate against unfair practices, highlighting the consequences of licensing lock-in from legacy vendors like Microsoft.”

AWS' response takes on a similar tone: "One exception to the well-functioning nature of the market for IT services is Microsoft’s licensing practices. We are encouraged by the CMA’s attention on this topic and its emerging views. We are also optimistic about the CMA’s considerations on how best to ensure that customers can choose the IT provider of their choice to run Microsoft’s immensely popular and critical productivity software."

Microsoft, as the target of much of the criticism, has disputed these claims and argues that neither AWS nor Google are being impacted to the extent they claim, stating in its response to the competitive landscape and committed spend agreements working papers: "Microsoft’s IP licensing terms do not meaningfully raise cloud rivals’ costs.”

The statement goes on to say: "Amazon and Google appear from all accounts likely to have ample margin (cash) to play with and compete profitably. Amazon and Google surely have sufficient war chests of available margin to compete today.

“Amazon and Google are investing $50bn and $30bn in capex, which demonstrates their committed ‘money where your mouth is’ belief in a profitable and competitive future in cloud. These are not the actions of marginalized or weakened rivals struggling to compete with the burden of compensating Microsoft for making profitable use of its [intellectual property] at (hyper) scale.”

Microsoft further points to the significant growth of both AWS and Google in the past couple of years in terms of revenue. "These results are the fruit of competition, not a lack of it. Competition is not soft, weak or cozy: Amazon, Microsoft and Google are 'punching each other hard.'”

Microsoft argues in its response "that the waters were, and remain, muddied by Amazon, Google, CISPE, and others about the correct economic adverse effects on competition question and how it is to be answered."

The CMA began its investigation in October 2023 and has a statutory deadline for its investigation of April 4, 2025.

Earlier this month, CISPE dropped an antitrust probe with the EU into Microsoft after the cloud giant made a $22m deal. Google tried and prevent CISPE from dropping the complaint, offering CISPE €14 million ($15.3m) in cash and €455m ($497.5m) in software licenses to continue its probe, to no avail. AWS reportedly contributed€6m ($6.56m).