Microsoft Accuses Google of Running “Shadow Campaigns” in EU to Discredit Its Business

Microsoft has publicly criticized rival Google for allegedly orchestrating covert campaigns across Europe to damage Microsoft’s reputation among regulators and policymakers, as the two tech giants continue their longstanding competition. According to a statement from Microsoft lawyer Rima Alaily, Google has funded and organized efforts through intermediaries to launch a coordinated “astroturf” movement designed to attack Microsoft’s practices, particularly in the cloud services sector, per CNBC.

In a blog post on Monday, Alaily accused Google of operating in the shadows by recruiting European cloud companies to serve as the public face of a newly formed advocacy group, while allegedly hiding its own involvement and financial backing. “This week an astroturf group organized by Google is launching,” Alaily wrote. “It is designed to discredit Microsoft with competition authorities, policymakers, and mislead the public.” Alaily went on to argue that Google’s use of third-party firms allows it to “obfuscate its involvement, funding, and control” in the campaign.

The latest conflict between the two companies adds a new chapter to their rivalry, which spans multiple industries including cloud infrastructure, online advertising, and productivity software. The timing of this dispute comes as Google faces heightened regulatory scrutiny in both the European Union and the United States, where it is currently undergoing its second antitrust trial with the Department of Justice.

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Alaily claims Google retained the advisory firm DGA Group to establish a coalition, known as the Open Cloud Coalition, to advocate against Microsoft’s practices in the European cloud market. According to Microsoft, at least one company declined to join the coalition after learning of Google’s financial involvement and its intentions to criticize Microsoft’s European business practices. Alaily linked to a flyer outlining the coalition’s objectives, stating it aims to promote a “fair, competitive, and open cloud services industry” across the UK and EU.

The dispute has surfaced amid Google’s complaint to the European Commission regarding Microsoft’s licensing policies for Windows Server, which Google has alleged are anti-competitive. Google’s complaint contends that Microsoft’s approach unfairly restricts competition by encouraging customers to opt for Microsoft’s cloud service over alternatives like Amazon Web Services (AWS). Microsoft, however, claims its policies allow customers to save an average of 36% when using Windows Server on its own platform rather than on AWS, according to its website.

The mounting rivalry in Europe mirrors tensions in the U.S., where Microsoft asserts that Google is using similar tactics. Alaily claims Google previously funded the Coalition for Fair Software Licensing, which last year urged the Federal Trade Commission (FTC) to investigate Microsoft. Additionally, she alleges Google offered members of a different group, the Cloud Infrastructure Services Providers in Europe (CISPE), $500 million if they would reject a proposed antitrust settlement regarding Microsoft. That case ultimately reached a settlement in July, though the purported incentive from Google highlights the depth of the tech giants’ competitive maneuvers, per CNBC.

Source: CNBC