Microsoft accuses Google of uncovering "covert campaigns" to undermine its cloud business.
The battle between Microsoft and Google has resurfaced.
Microsoft has decided to escalate its confrontation with Google, accusing the company of conducting what it calls "shadow campaigns" to discredit its cloud services business. In a harsh blog post, Microsoft’s Deputy General Counsel, Rima Alaily, claimed that Google plans to launch a new "astroturfing" group this week. Alaily contends that this group aims to undermine Microsoft's reputation among competition authorities and policymakers, as well as to mislead the public.
According to Alaily, Google is trying to hide its involvement, funding, and control over this new organization by recruiting a small number of European cloud service providers to act as its public face. It appears that when this group is launched, Google will present itself as just another member, avoiding the leadership role.
It is alleged that Google has hired a lobbying and communications agency in Europe to establish this new entity. Microsoft claims to have become aware of this plan after an European cloud service provider, one of those contacted, decided not to join and alerted Microsoft about the situation. According to Alaily, this company informed her that the organization will be led and mostly funded by Google, with the purpose of attacking Microsoft’s cloud computing business in the European Union and the United Kingdom.
The launch of this lobbying group comes just weeks after Google filed an antitrust complaint with EU regulators in September, accusing Microsoft of using unfair licensing contracts for its Azure cloud services. This followed Microsoft reaching an agreement with an industry group sponsored by European cloud infrastructure providers, who expressed similar concerns about Microsoft's licensing practices.
Microsoft has alleged that Google attempted to disrupt its agreement with the Cloud Infrastructure Services Providers in Europe (CISPE) group in July, offering CISPE members a combination of cash and credits totaling up to $500 million to reject the agreement. CISPE ultimately agreed with Microsoft to withdraw its 2022 complaint to the EU after Microsoft allowed European providers to offer their applications and services on local cloud infrastructure.
Regarding Microsoft’s licensing fees for Windows Server, Google spokesperson Laura Wheeler stated that they have publicly expressed concerns about Microsoft’s anti-competitive practices, which they believe limit customers and have negative effects on cybersecurity, innovation, and consumer options.
Amit Zavery, Vice President of Google Cloud, also spoke out last month, stating that Microsoft imposes a 400% surcharge on customers who wish to continue using Windows Server on rival cloud providers, while this fee does not apply on Azure.
For its part, Microsoft argues that it should be charged when its intellectual property is used in the creation and offering of cloud services, citing that the entertainment sector, like any other market, requires payment for the use of such content, with no discounts for prior consumer ownership.
Since the end of a six-year legal truce in 2021, tensions between Microsoft and Google have begun to resurface, recalling past rivalries and promising a new phase of disputes centered around cloud competition.
