Microsoft alleges that a lobbying group that launched this week — the Open Cloud Coalition — is being covertly funded and controlled by Google to “discredit Microsoft with competition authorities, and policymakers and mislead the public.”
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In late September, Google Cloud filed a competition complaint against Microsoft with the European Commission, alleging that its rival imposes unfair rules that prevent customers from easily moving their workloads to a competitor’s cloud, including price increases of 400%.
In what is Microsoft’s first response to those claims, Rima Alaily, the company’s deputy general counsel, hit back in a blog post that alleges Google is astroturfing, or deceptively bankrolling of an organisation aiming to promote a specific message.
The Open Cloud Coalition (OCC) states on its website that it is a “collaborative advocacy group, promoting a diverse, competitive, and resilient cloud services industry across the UK, EU, and global markets.”
Alaily and Microsoft, however, allege that the OCC is being quietly backed by Google to attack Microsoft and another hyperscale rival: AWS.
“We have been informed that the organisation will be led by Nicky Stewart, who personally penned complaints against Microsoft and AWS in the UK Competition and Market Authority’s ongoing investigation into the cloud computing market.”
Google Cloud is listed among the OCC’s members on its website, alongside the likes of Pulsant, Prolinx, and ControlPlane.
However, Microsoft claims that Google has largely obfuscated its involvement and instead recruited several European cloud providers to serve as its public face while it “present[s] itself as a backseat member rather than its leader.”
The Alaily-authored post even suggests Google could have offered financial incentives for companies to join, suggesting: “It remains to be seen what Google offered smaller companies to join, either in terms of cash or discounts.”
Google’s alleged bankrolling of the OCC follows its reported attempts to offer millions of dollars in cash and software licences to the Cloud Infrastructure Services Providers in Europe (CISPE) to continue competition complaints against Microsoft.
CISPE, an industry group made up of cloud infrastructure providers, took action against Microsoft in 2022 over unfair exit practices for customers.
The parties have settled in the summer, with Microsoft agreeing to implement changes as part of a settlement agreement.
Microsoft alleges that following Google’s “rejection” by CISPE, its rival instead launched the OCC to continue the fight.
Alaily wrote that Microsoft became aware of the organisation’s formation after one small European cloud provider that was approached to join the OCC instead informed the company, providing a recruitment document that allegedly “omits any mention of Google’s involvement and the actual purpose of the organisation.”
“It seems Google has two ultimate goals in its astroturfing efforts,” Alaily wrote: “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.”
In addition to the blog post calling out Google for its alleged work behind the scenes at the OCC, Microsoft also took issue with how publicly its rival announced its competition complaint.
“Most such complaints are submitted confidentially, but Google took the opportunity to broadcast its concerns,” Alaily wrote. “Although it suggests that Google is acting to protect the interests of European customers, its complaint reads differently."
Google Cloud took issue with Microsoft’s licensing practices that apply to an array of enterprise-focused cloud products, chiefly Windows Server, which serves as the backbone for applications and services across the continent.
Google Cloud contended that Microsoft restricted Windows Server users from running them on any hardware, forcing them to use Azure.
As a result, Google Cloud claimed customers have complained that Microsoft’s restrictive licensing has incurred significant hidden costs that have forced businesses to divert money from investments in growth and digital transformations.
“Fundamentally, Google’s argument is that it should not have to pay Microsoft when it builds and offers cloud services using our intellectual property – namely Windows Server – if customers have otherwise purchased the same software for a very different use, i.e., on their own server.
“We disagree. When a streaming service, like Netflix or Disney, includes a movie in their service, they pay for that right. They don’t get a credit or discount if a subscriber happens to own a DVD of the same movie. Software and the cloud are no different.”
Capacity has contacted both Google Cloud and the OCC for comment.
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