Microsoft has leveled serious accusations against Google, claiming that the search giant is funding a proxy campaign aimed at discrediting Microsoft in the eyes of regulatory authorities and policymakers in the European Union and beyond.
In a detailed blog post authored by Rima Alaily, Microsoft’s deputy general counsel, the company alleges that Google has gone to “great lengths to obfuscate its involvement, funding, and control” of the Open Cloud Coalition. This coalition, described as a group of “cloud service providers, industry leaders, and stakeholders,” purports to advocate for a “fair, competitive, and open cloud services industry across the UK and EU.”
Allegations of Covert Operations
According to Microsoft, Google hired a lobbying agency in Europe to create and operate the Open Cloud Coalition. The search giant allegedly recruited “a handful of” European cloud providers to serve as the public face of the campaign, while Google itself plans to “present itself as a backseat member” rather than the leader and primary funder.
Microsoft points to a recruitment document that makes no mention of the group’s claimed affiliation with Google as evidence of this covert operation. Additionally, Microsoft highlights the involvement of Nicky Steward, who co-authored a complaint against Microsoft and Amazon Web Services as part of the UK’s ongoing antitrust investigation into the cloud services market.
Motivations and Implications
Microsoft speculates on what Google might have offered smaller companies to join the coalition, suggesting it could be in the form of cash or discounts. One cloud provider approached by Google reportedly claimed that the company intends to direct the coalition to attack “Microsoft’s cloud computing business in the European Union and the United Kingdom.”
In response to these allegations, a Google spokesperson highlighted, “We’ve been very public about our concerns with Microsoft’s cloud licensing. We and many others believe that Microsoft’s anticompetitive practices lock-in customers and create negative downstream effects that impact cybersecurity, innovation, and choice.” The spokesperson also pointed to four separate blog posts on the matter.
Regulatory Scrutiny and Strategic Moves
Microsoft argues that Google’s actions are a reaction to the increasing regulatory scrutiny of its search, advertising, and mobile app store businesses. By Microsoft’s count, Google is currently facing at least 24 antitrust investigations globally, including a Department of Justice probe that could potentially lead to the breakup of the company.
Never in the past two decades have Google’s search, digital advertising, and mobile app store monopolies faced such a concerted and determined threat as they do today. At a time when Google should be focused on addressing legitimate questions about its business, it is instead turning its vast resources towards tearing down others. It is disappointing that, with the foundation of their business facing jeopardy, they have sought to bolster their cloud computing service – Google Cloud Platform – by attacking ours.
Rima Alaily, Microsoft’s Deputy General Counsel
Previous Antitrust Settlement Disruptions
These accusations follow reports that Google attempted to derail an antitrust settlement Microsoft had negotiated with the Cloud Infrastructure Services Providers in Europe (CISPE). In July, Bloomberg reported that Google had offered the group €470 million to proceed with litigation against Microsoft, an offer that CISPE ultimately rejected.
Google’s Shift to Cloud Services
As revenue growth from digital ads has slowed for Google in recent years, the company has increasingly turned to the cloud market to compensate. In 2023, Google’s cloud business broke even for the first time, and more recently, the unit generated a $900 million profit in the first quarter of this year. By developing its own search engine and continuing to invest in AI, Meta aims to reduce its dependence on external tech giants and enhance its capabilities, positioning itself for greater autonomy and resilience in the tech landscape.
