Microsoft and Google in war of words following launch of anti-competitive cloud coalition

Microsoft questions coalition’s origins

Microsoft, however, has a different view on the origins of the OCC’s creation, with corporate vice-president and deputy general counsel Rima Alaily claiming the coalition was created by Google to “mislead the public” and “discredit Microsoft with competition authorities”.

Alaily made the claims in a blog post, where she accused the coalition of “astroturfing”, which is a practice whereby an organisation seeks to hide or downplay its involvement in a campaign of some kind and make it appear as though its origins are more grassroots in nature.

“Google has gone [to] great lengths to obfuscate its involvement, funding and control, most notably by recruiting a handful of European cloud providers, to serve as the public face of the new organisation,” the blog stated.

“Google, we understand, will likely present itself as a backseat member rather than its leader. It remains to be seen what Google offered smaller companies to join, either in terms of cash or discounts.”

Computer Weekly put this claim to the OCC, and was passed on a copy of an opinion piece that Stewart has penned in the wake of Microsoft’s claims, which she described as an attempt to undermine what it is the coalition is trying to do.

“We will not allow any entity to cast shade on the debate in an effort to obscure the wider issues,” said Stewart. “As an industry veteran who has personally struggled with the cloud industry’s challenges, I know how difficult it can be to thrive in a market where the odds are stacked considerably against smaller cloud providers – a dynamic that often disadvantages customers.

“Prevailing market conditions since my time in the industry have not changed, and that’s why it is so important that our members’ voices are heard; they navigate the realities of the market every day, and their insights are vital to driving meaningful change.”

In response to Microsoft’s claims that Google Cloud is pulling the strings behind the scenes at the OCC by posing as a member, Stewart emphasised that the coalition’s governance is “rooted in equality” and works on a “one member, one vote” ethos.

“This structure ensures that all perspectives are considered in shaping the future of cloud in Europe,” she said. “We will not be swayed or bullied by larger cloud providers who would prefer to silence those who speak out. Our principles are rooted in the belief that the market should work for all – not just a chosen few – without fear of retaliation.”

Microsoft verses Google

Either way, Microsoft’s Alaily is of the view that Google’s actions are all part of an attempt to “distract from the intense regulatory scrutiny” the company is facing by “discrediting Microsoft” while seeking to “tilt the regulatory landscape in favour of its cloud services rather than competing on its own merits”.

According to the Microsoft blog post, the company is seeking to do this through organisations such as the OCC, but also by directly lobbying competition authorities worldwide to impose restrictions on its hyperscale cloud competitors.

“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,” said Alaily.

Computer Weekly contacted Google for a response to Microsoft’s accusations of “astroturfing”, and a spokesperson for the internet search giant said that the firm has been “very public” in the past about its concerns regarding Microsoft’s cloud licensing tactics.

“We and many others believe that Microsoft’s anti-competitive practices lock-in customers and create negative downstream effects that impact cyber security, innovation and choice,” the spokesperson said, before pointing to a selection of blogs the company has previously published on this topic.

It is worth noting that while the Microsoft accusations come hot on the heels of the OOC’s formation, they also follow Google’s decision to file an anti-trust complaint about Microsoft’s cloud licensing practices with the European Commission in September 2024.

Incidentally, Google is far from the first entity to raise concerns about Microsoft’s cloud licensing practices. The practice is also in-scope of the CMA’s probe.

The Cloud Infrastructure Service Providers In Europe (CISPE) trade body previously emerged as a vocal opponent to Microsoft’s cloud licensing practices, having gone so far as to file a complaint about them with the European Commission’s Directorate-General for Competition in November 2022.

However, in July 2024, news emerged that CISPE had agreed to controversially withdraw its complaint as part of a $22m settlement with Microsoft.

In response to the news, the Coalition for Fair Software Licensing (CFSL) described the deal as “Microsoft’s latest attempt to avoid regulatory scrutiny without addressing the underlying anti-competitive practices that impact millions of cloud customers worldwide”.