Cloud wars: Microsoft accused Google of creating a shadow coalition against its business

The conflict between Microsoft and Google in the cloud services market is escalating. Microsoft has accused Google of creating a shadow organization to lobby its interests in Europe, TechCrunch reports. Microsoft Deputy General Counsel Rima Alaily claims that Google secretly formed the Open Cloud Coalition to advance its interests in cloud solutions and gain support from politicians and antitrust authorities.

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Alayli said Google was trying to hide its leading role in the coalition by highlighting smaller European companies. “When the group launches [October 29], we believe Google will try to present itself as a minor participant rather than a leader,” a Microsoft spokeswoman wrote. She also noted that it remains unclear what benefits Google offered other companies for their participation, be it cash or discounts on services.

The coalition is led by Nicky Stewart, director of public sector affairs at British hosting company Civo. The documents released by Microsoft indicate that international consulting firm DGA Group was behind the recruitment of participants, a representative of which declined to disclose the organization’s sources of funding.

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The group consists of 10 companies, including Google, Civo and a number of other cloud providers such as Gigas, ControlPlane and Pulsant. Stewart, in a statement to TechCrunch, stressed that the coalition is “transparent” about its members, advocates for an open market and improved interoperability between cloud services in Europe, and is not created to oppose any one company.

At the same time, it is reported that the conflict began to unfold against the backdrop of licensing changes that Microsoft introduced in 2019, making its enterprise software products more expensive for use on competing cloud platforms. This led to an antitrust complaint and claims from the non-profit trade association of cloud infrastructure service providers in Europe (CISPE). The association accused Microsoft of using its authority to tie customers to the Azure cloud service, as a result of which the software giant had to pay CISPE $22 million and agree to improve conditions for some cloud providers, ensuring that they could run Microsoft software on their own infrastructure.

However, this agreement did not affect the largest market players such as AWS, Alibaba and Google. In September, the latter filed an antitrust complaint against Microsoft, accusing the company of unfair licensing practices that force customers to remain on Azure cloud hosting. It is noteworthy that before this Google offered CISPE members €470 million to continue the case against Microsoft, but the offer was rejected.