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Microsoft has accused Google of running “shadow campaigns” seeking to undermine its position with regulators and politicians, the latest example of the escalating competition between the tech giants in cloud computing and data centres.
Rima Alaily, Microsoft’s deputy general counsel, alleged in a blog post on Monday that Google was secretly backing a lobbying group “designed to discredit Microsoft with competition authorities and policymakers and mislead the public”.
“Google has gone through great lengths to obfuscate its involvement, funding, and control [of the group],” she added. “When the group launches, Google will probably present itself as a back seat member rather than its leader. It remains to be seen what Google offered smaller companies to join, either in terms of cash or discounts.”
Microsoft branded the organisation in question, the Open Cloud Coalition, an “AstroTurf group” — referring to the practice of powerful corporations concealing their involvement with certain groups or issues to make it seem like a grassroots-driven endeavour. Alaily said that Google had hired advisory firm DGA Group to set up the UK and EU-focused group and that Microsoft had been tipped off by a company approached to join.
In response, a Google spokesman said: “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”.
“We are not anti any one company. We are a pro-market coalition that is focused on advocating for principles that will strengthen the marketplace for cloud services in Europe, principally openness and interoperability,” said Nicky Stewart, a senior adviser to the Open Cloud Coalition.
Microsoft’s unusually blunt comments reflect the fierce competition between Big Tech firms in cloud computing, where demand has surged as corporations have moved their data online and as artificial intelligence companies have demanded ever-greater processing power to train their large language models. Google remains a distant third to Microsoft’s Azure and leader Amazon Web Services in cloud market share.
Last month, Google filed an antitrust complaint in the EU against Microsoft alleging that it was using strict software licensing terms to stop European customers from moving their data and workloads from Azure to competitors’ clouds.
Microsoft said on Monday that Google had filed its complaint and helped found the Open Cloud Coalition after failing to convince members of another lobbying group, Cloud Infrastructure Services Providers, to reject a settlement in a separate antitrust case, despite offering $500mn of cash and credits. Cispe ultimately did settle.
It also alleged that Google was guilty of a wider “pattern of shadowy campaigns”, including placing opinion pieces, pitching negative stories to reporters and suggesting questions to US congressional offices about its business in China.
The allegations come at a sensitive time for Google with the US Department of Justice debating whether to demand a break-up of its monopolistic search business, which was found earlier this year to have engaged in anti-competitive behaviour. The company also lost an antitrust case against its Play app store brought by Fortnite developer Epic and faces trial in a second DoJ case over its ad tech business.
“It seems Google has two ultimate goals in its astroturfing efforts: distract from the intense regulatory scrutiny Google is facing around the world by discrediting Microsoft and tilt the regulatory landscape in favour of its cloud services rather than competing on the merits,” Alaily wrote.
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