Microsoft accuses Google of secretly funding regulatory astroturf campaign

Microsoft is accusing Google of funding a proxy campaign designed to discredit it in the eyes of regulatory authorities and policymakers in the European Union and beyond. In a blog post penned by Rima Alaily, the company’s deputy general counsel, Microsoft claims the search giant has gone to “great lengths to obfuscate its involvement, funding and control” of the Open Cloud Coalition, a group of “cloud service providers, industry leaders and stakeholders” that says it’s committed to advocating for a “fair, competitive, and open cloud services industry across the UK and EU.”

According to Microsoft, Google hired a lobbying agency in Europe to create and operate the organization, and recruited “a handful of” European cloud providers to appear as the public face of the soon-to-launch campaign. The company says that Google plans to “present itself as a backseat member” of the Open Cloud Coalition, rather than its leader and primary funder. As one example, Microsoft points to a recruitment document (PDF link) that makes no mention of the group’s claimed affiliation to Google. It also notes the involvement of Nicky Steward, who co-wrote a complaint against Microsoft and Amazon Web Services as part of the UK’s ongoing antitrust investigation into the cloud services market.

“It remains to be seen what Google offered smaller companies to join, either in terms of cash or discounts,” Microsoft says. It adds that one of the cloud providers Google approached about joining the Open Cloud Coalition claims that the company will direct the group to attack “Microsoft’s cloud computing business in the European Union and the United Kingdom.”

Engadget was unable to independently verify Microsoft’s claims.

“We’ve been very public about our concerns with Microsoft’s cloud licensing. We and many others believe that Microsoft’s anticompetitive practices lock-in customers and create negative downstream effects that impact cybersecurity, innovation, and choice,” a Google spokesperson told Engadget, and pointed us to four separate blog posts on the matter.

As for why Google would potentially go to the extraordinary lengths of funding an astroturf campaign, Microsoft points to the recent uptick in regulatory scrutiny of the company’s search, advertising and mobile app store businesses. By Microsoft’s count, Google faces at least 24 antitrust investigations globally, including a Department of Justice probe that could see the potential break up of the company.

“Never in the past two decades have Google’s search, digital advertising, and mobile app store monopolies faced such a concerted and determined threat as they do today.” Alaily writes. “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. It is disappointing that, with the foundation of their business facing jeopardy, they have sought to bolster their cloud computing service – Google Cloud Platform – by attacking ours.”

The accusations come after Google had reportedly attempted to derail an antitrust settlement Microsoft had negotiated with the Cloud Infrastructure Services Providers in Europe (CISPE). In July, Bloomberg wrote that Google had offered the group €470 million to go forward with litigation against its rival, an overture CISPE ultimately rejected.

As revenue growth from digital ads has slowed for Google in recent years, the company has increasingly turned to the cloud market to pick up the slack. In 2023, Google’s cloud business broke even for the first time. More recently, the unit generated a $900 million profit in the first quarter of this year.

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