Microsoft and Google’s Brussels lobbying war heats up

BRUSSELS — It's the clash of two tech titans, this time over who dominates the cloud.

Technology giant Microsoft on Monday evening took a swing at its rival Google over lobbying practices in Europe that it deemed “astroturfing” and a public affairs campaign waged “in disingenuous ways.”

In an unusual move, Microsoft published a scathing blog post, written by deputy general counsel Rima Alaily, accusing Google of being the secret driving force behind a brand-new "Open Cloud Coalition" lobby group designed to influence European Union and British rule-making in the cloud market.

DGA Group, a consultancy leading the effort, told POLITICO the lobby group launched overnight “with 10 members across multiple cloud markets,” including Google Cloud.

But by calling the group out ahead of launch, Microsoft sought to emphasize that it would be a Google-backed campaign to “discredit [Microsoft] with competition authorities, and policymakers and mislead the public.”

“In Europe and in the U.S., Google has taken a page out of its decades-long playbook for litigating against antitrust enforcers,” Alaily wrote. “It is funding — directly and indirectly — various industry commentators and academics to attack Microsoft and author 'studies' that can be cited to discredit us."

Google quickly clapped back, saying it had been open about its concerns over Microsoft's cloud business.

“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. You can read more in our many blog posts on these issues,” spokesperson Emily Clarke said in a statement.

Clarke said the company belonged “to a number of different trade groups that advocate for issues important to us and our customers.”

The Open Cloud Coalition dismissed criticism, too, saying it was “transparent about its members.”

“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,” Nicky Stewart, a senior adviser to the Open Cloud Coalition, said in an emailed comment.

A long-running fight

The Google-Microsoft rivalry goes back decades, but recent lobbying clashes in Brussels have rekindled animosity between the two.

In September, Google filed an antitrust complaint with the European Commission asking for a probe into Microsoft’s licensing contracts that it said may have unfairly pushed customers toward the Azure cloud business.

That complaint came hot on the heels of a deal in another closely watched standoff: Over the summer, Microsoft signed a truce with cloud association CISPE (backed by rival Amazon) that saw it get paid to drop a complaint to European Union antitrust regulators.

In her blog post, Alaily gave new details on the backroom fight over the deal with CISPE. “In July, when CISPE was on the verge of resolving its complaint against Microsoft, Google offered CISPE’s members a combination of cash and credits amounting to an eye-popping $500 million to reject the settlement and continue pursuing litigation. Wisely, they declined,” she wrote.

CISPE declined POLITICO's request to comment on these details.

Microsoft’s blog post comes amid record pressure on Google as it faces a lawsuit in the United States that, regulators suggested earlier this month, could seek to break it up.

Brendan Bordelon contributed to this report.