Microsoft accuses Google’shadow campaigns’to undermine Microsoft’s business

Microsoft accused Google of “shadow campaigns” to undermine Microsoft’s position with politicians and regulators. This is the latest example of escalating rivalry between tech giants when it comes to cloud computing and data centers.

Rima Alaily is Microsoft’s deputy general attorney. She claimed in a post that Google secretly backed a lobbying organization “designed to mislead policymakers, competition authorities, and the public”.

She added that Google has taken great measures to hide its involvement, funding and control of the group. Google is likely to be a member of the group, not its leader, when it launches. Google has yet to reveal what it offered to smaller companies in the form of discounts or cash.

Microsoft called the Open Cloud Coalition an “AstroTurf Group” – referring to a practice where powerful corporations hide their involvement in certain groups or issues so that it appears as if they are grassroots initiatives. Alaily reported that Google hired the advisory firm DGA Group for the UK and EU focused group, and that Microsoft was tipped by a company that approached them to join.

A Google spokesperson responded: “We, and many others, believe that Microsoft’s anti-competitive practice locks in customers and creates negative downstream effects which impact cyber security and innovation”.

“We do not oppose any company. “We are a promarket coalition focused on advocating principles that will reinforce the market for cloud services across Europe, principally interoperability and openness,” said Nicky Stewart a senior advisor to the Open Cloud Coalition.

Microsoft’s unusually blunt remarks reflect the fierce competition among Big Tech firms. Demand has risen as corporations have moved data online, and artificial intelligence companies are demanding ever-greater computing power to train large language models. Google is a distant third behind Microsoft’s Azure, and leader Amazon Web Services when it comes to cloud market shares.

Google has filed a complaint against Microsoft in the EU alleging that Microsoft was using restrictive software licensing terms to prevent European customers from moving data and workloads away from Azure’s cloud to rival clouds.

Microsoft announced on Monday that Google filed its complaint, and had helped form the Open Cloud Coalition, after it failed to convince members from another lobbying group, Cloud Infrastructure Services Providers to reject a settlement of a separate antitrust suit, despite having offered $500mn in cash and credit. Cispe eventually settled.

The report also accused Google of engaging in a “pattern” of shadowy campaigning, including the placement of opinion pieces and negative stories pitched to journalists. It suggested that US Congress offices ask Google about its China business.

The accusations come at a time when the US Department of Justice is debating whether or not to demand that Google’s monopolistic business of search, which was found to be anti-competitive earlier this year, be broken up . The company lost an antitrust lawsuit against its Play appstore brought by Fornite developer Epic, and is facing trial in a DoJ case involving its adtech business.

Alaily wrote: “It appears Google has two ultimate objectives in its astroturfing effort: distract from intense regulatory scrutiny Google faces around the globe by discrediting Microsoft, and tilt the regulatory environment in favour of their cloud services instead of competing on the merits.”