NextFin News - Alphabet’s Google announced on November 28, 2025, that it has withdrawn its formal antitrust complaint against Microsoft concerning the latter’s cloud business practices in the European Union. The complaint had been lodged last year with the European Commission, accusing Microsoft of leveraging product bundling and contractual restrictions—including Windows Server and Office licensing—to lock customers into its Azure cloud platform, thereby stifling competition and limiting customer choice. Google attributed the withdrawal to the EU’s new initiative to conduct a broader investigation under the Digital Markets Act (DMA), assessing potential unfair market behavior by Microsoft and Amazon as dominant cloud providers. This development occurred amid ongoing EU regulatory scrutiny in Brussels and was publicly communicated by Giorgia Abeltino, Google Cloud’s head of government affairs and policy in Europe, who emphasized Google’s intent to continue cooperating with regulators to ensure an open and competitive cloud market.
The EU Commission’s fresh probe, expected to last approximately one year, aims to determine if Microsoft and Amazon’s business conduct amounts to gatekeeper abuses that would require imposing new obligations or remedies under the DMA, a landmark regulatory framework targeting digital platform dominance. Market share data cited in reports show that Amazon Web Services (AWS) leads with approximately 30%, Microsoft Azure follows at around 20%, and Google Cloud holds about 13% of the European cloud market. Despite Google’s complaint withdrawal, the Commission’s independent inquiry continues, signaling that regulatory risks to Microsoft’s cloud operations remain material in the medium term.
This move by Google not only defuses a direct legal clash between two cloud giants but also reflects a strategic pivot by Google towards competing primarily on product innovation and pricing rather than through protracted litigation. Following the news, Microsoft’s shares rose about 1.5% on November 28, 2025, as investors viewed the withdrawal as reducing immediate legal uncertainty.
Underlying this episode are broader industry dynamics and regulatory trends. Microsoft’s cloud division, led by Azure, has been a key growth engine amid surging demand for AI-driven cloud infrastructure. Its FY 2026 Q1 earnings reported an 18% revenue increase year-over-year, highlighting cloud services as a robust profit and growth driver. However, Microsoft is simultaneously investing tens of billions quarterly to scale AI data centers, which has stirred investor concerns on capital expenditure sustainability. The strategic partnership renewal between Microsoft and OpenAI, with a $135 billion valuation stake and $250 billion committed Azure usage, solidifies Microsoft’s leadership in AI infrastructure but also raises regulatory and economic stakes.
Google’s withdrawal should be analyzed against this backdrop of intensifying cloud market competition and evolving regulatory regimes designed to curb dominant platform behaviors while fostering innovation. By stepping back from a direct complaint, Google appears to acknowledge the emerging regulatory architecture and chooses to engage constructively within the EU’s framework rather than relying on adversarial tactics. This may reflect a more mature competitive approach focused on market-driven differentiation rather than litigation.
For Microsoft, the continued EU probe means it must navigate complex regulatory constraints while advancing its expansive AI and cloud investments. The DMA’s market gatekeeper designation, if applied, could require operational adjustments to licensing, bundling, or pricing strategies, potentially impacting Azure’s competitive positioning and profitability. Yet, Microsoft’s entrenched ecosystem—Windows and Office integration coupled with AI innovation—is a formidable moat that regulators must balance against competitive fairness.
Looking forward, this episode underscores the intensifying intersection of competition policy and AI/cloud technology evolution in 2025 and beyond. EU regulatory authorities are signaling a firm stance on digital platform dominance, particularly in strategic technology sectors like cloud computing. Companies like Microsoft and Amazon, commanding over half the European market collectively, face heightened compliance and adaptation pressures. Meanwhile, competitors such as Google and emerging cloud providers must innovate product offerings and services to challenge entrenched incumbents without overly relying on legal avenues.
Investors and market watchers should watch the EU Commission’s ongoing probe results closely, as they will set important precedents on how digital monopolies are managed, influencing future M&A, partnership strategies, and capital allocation decisions in the cloud and AI sector. The withdrawal also highlights a temporary easing of legal risks for Microsoft, potentially supporting near-term stock performance amid an otherwise volatile macroeconomic environment shaped by US Fed rate cut expectations and AI investment debates.
Finally, this development illustrates the increasingly strategic role of regulatory environments in shaping Big Tech competition globally. With Donald Trump serving as U.S. President in 2025, political attitudes towards tech regulation remain a pivotal variable influencing cross-border enforcement coordination and industry dynamics.
According to Reuters, the EU investigation will continue independently, and the regulatory landscape remains fluid, requiring continuous monitoring by stakeholders across technology, legal, and investment domains.
