Google enlists new ‘free’ data transfer service as the EU Data Act deadline approaches

Google is rolling out a free data transfer service for enterprises in the EU and the UK as the deadline for key provisions of the EU Data Act targeting data interoperability to reduce vendor lock-in looms at the end of the week.

The new offering, called Data Transfer Essentials, waives egress fees for multicloud transfers within the same company for a large set of Google services, and according to Google is a direct response to Article 34 (Chapter VIII) of the EU Data Act.

This particular statute of the Act allows customers to use multiple cloud services simultaneously, otherwise known as parallel processing, and mandates that only actual data egress costs may be passed on to customers without the addition of profit margins.

Parallel processing is important for several enterprises employing multicloud strategies as they may have architected an application or a service that might reside on multiple cloud platforms, and before the Act came into effect, these enterprises faced challenges around data transfer, especially with costs and performance trade-offs.

Data Transfer Essentials, according to Google, solves these challenges by enabling cost-optimized data transfer between two services of an enterprise that are running on different cloud platforms.

Currently, it supports 21 Google services, including Cloud SQL, Spanner, AlloyDB, Bigtable, BigQuery Storage API, and Cloud Run for customers subscribing to premium plans.

Google beyond the basic requirement

When asked about the rationale behind the introduction of the new service, a Google spokesperson said that the hyperscaler was going “above and beyond what the data act requires by eliminating the cost of in-parallel processing fees for customers in the EU and UK.” 

In contrast, Microsoft is keeping the fees “at cost”. Moreover, a 2024 report from the UK’s competition watchdog, the Competition and Markets Authority (CMA), showed that Microsoft, at that time, found the implementation of Article 34 challenging and complex, citing that it was difficult to identify EU customers.

IBM, on the other hand, communicated to the watchdog that it would determine EU customers based on the location of their headquarters to comply with the statute.

Google, according to the report, was in favor of compliance and said that it was incentivised to encourage multicloud.

AWS’s comments were redacted from the report, but the hyperscaler confirmed in an email response to NetworkWorld that it was offering “reduced” fees for EU customers. 

It further claimed that most, nearly 90%, of its enterprise customers already pay nothing for data transfer as the hyperscaler provides 100 gigabytes per month for free, to use for any purpose.

Google’s play for goodwill

According to industry experts, Google’s launch of the new service is a play for goodwill.

“…offering it at no cost positions Google competitively: it signals to enterprises that Google supports multicloud flexibility rather than trying to lock them in,” said Derek Ashmore, AI enablement principal at AI and cloud consultancy firm Asperitas. “In other words, it’s both a regulatory necessity and a strategic move to build trust with enterprise customers who increasingly demand interoperability.”

Ashmore said that the launch of the new service doesn’t mean that the hyperscaler is walking away from sizeable revenue, as Data egress fees are a small fraction of Google Cloud’s overall revenue, especially compared to compute, storage, and managed service consumption.

“…the lost egress revenue is relatively minor compared to the trust and growth potential Google gets by removing a known barrier to cloud adoption,” Ashmore added.

For enterprises, though, the new service, as well as the EU Data Act’s other provisions to eliminate profiteering from data egress charges, should improve bargaining power and flexibility, Ashmore said. “Enterprises no longer need to architect around egress charges or accept vendor lock-in simply because it’s too costly to move.”

However, he did point out that actual savings for enterprises will “heavily” depend on the size of the data and how often it’s moved.

“For companies running petabyte-scale workloads, waived egress fees can translate into significant six or seven-figure annual savings. For smaller organizations, the bigger win is the strategic flexibility rather than sheer cost reduction,” Ashmore explained.

Another deadline approaching

Hyperscalers are also working on complying with another statute of the Act — Article 29 — that aims to eliminate profiteering from data egress fees completely by January 12, 2027.

Back in 2024, Google, AWS, and Microsoft started waiving data transfer fees for enterprise customers moving their business to another cloud provider.

These moves were a result of the EU Data Act and other investigations into possible anti-competitive practices conducted by the UK’s CMA and the US Federal Trade Commission (FTC) alongside the EU in 2023.

However, AWS and Google haven’t made the process of claiming the waiver easy.

At AWS, for example, enterprises will need to send in requests to AWS support and wait for approval before they can receive a credit for the cost of migrating the data, the company said in a blog post. Google, too, has a similar process, wherein an application needs to be submitted for a case-by-case review of the Google Cloud team in order to process the fee waiver.