Microsoft Shares Rise as Google Withdraws EU Cloud Complaint
The move eases direct competitive pressure but comes as Brussels launches a broader, sector-wide investigation into cloud market leaders.
Microsoft Corp. (MSFT) shares gained on Friday after its chief cloud rival, Alphabet’s Google (GOOGL), withdrew a formal antitrust complaint in the European Union, removing a significant source of direct legal and competitive pressure on the software giant's lucrative Azure cloud business.
Shares in the Redmond, Washington-based company climbed approximately 1.2% to $491.49 in morning trading, pushing its market capitalization to over $3.6 trillion. The move was a direct reaction to the easing of a regulatory headwind that has shadowed its European cloud operations for more than a year.
Google's complaint, first lodged in September 2024, centered on allegations that Microsoft's licensing terms were anti-competitive, effectively locking customers into its Azure cloud platform and making it difficult for them to switch to rival services. Such practices have been a long-standing point of contention for smaller European cloud providers as well.
The withdrawal, however, is not a sign of lessened scrutiny. It comes just a week after the European Commission announced a sweeping, year-long investigation into the broader cloud computing market. That probe, under the new Digital Markets Act (DMA), will examine the market power of dominant players, specifically Microsoft's Azure and Amazon Web Services (AWS), to determine if they should be designated as "gatekeepers" subject to stricter rules promoting competition.
In a statement, Google acknowledged the strategic shift, indicating it was withdrawing its specific grievance in light of the EU's more comprehensive, sector-wide assessment. The company affirmed it would continue to engage with regulators to advocate for openness and choice in the cloud market.
For Microsoft, the development offers a tactical victory. It dissolves a direct legal challenge initiated by its primary competitor in the rapidly growing cloud infrastructure space. The Azure platform is a critical engine of growth for Microsoft, with the company consistently reporting strong double-digit revenue growth from its cloud services. The company's quarterly revenue growth recently stood at over 18% year-over-year, largely driven by demand for Azure and its integrated AI services.
Despite the removal of Google's complaint, the fundamental regulatory challenge for Microsoft in Europe remains, and has arguably expanded. The broader DMA investigation carries significant weight and could result in mandated changes to Microsoft's business practices if the EU finds that its market position stifles competition.
This is not the first time Microsoft has faced such scrutiny in the region. In July 2024, the company settled a separate antitrust complaint for €20 million with the Cloud Infrastructure Services Providers in Europe (CISPE), a trade group representing smaller cloud firms. That settlement included agreements to standardize some pricing for smaller operators using Azure.
Investors are now weighing the immediate positive of a dismissed competitor lawsuit against the medium-term uncertainty of the EU's wider probe. For now, the market has interpreted the news as a net positive, removing a specific, contentious legal battle and allowing Microsoft to focus on the broader regulatory engagement and its intense market-share competition with AWS and Google Cloud.