The European cloud wars are heating up. Microsoft has accused Google of waging a secret war against Azure cloud company to win favor with policymakers and antitrust authorities in Europe.
In a blog post today, Microsoft deputy general counsel Rima Alaily preempted the launch of a new lobby group called the Open Cloud Coalition, which includes Google and several smaller cloud providers. Alaily called the outfit an “astroturf group organized by Google,” alleging that Google had obscured its involvement, funding, and control by using smaller European cloud providers as the face of the coalition.
“When the group launches, Google, we understand, will likely present itself as a backseat member rather than its leader,” Alaily writes. “It remains to be seen what Google offered smaller companies to join, either in terms of cash or discounts.” The Coalition is being led by Nicky Stewart, public sector director of U.K. cloud hosting company Civo. A document for the initiative, published by Microsoft today, shows that global “advisory firm” DGA Group was behind the recruitment drive. DGA confirmed that the coalition will formally launch Tuesday (October 29). In response to a query from TechCrunch, a DGA spokesperson added that it wouldn’t disclose the funding makeup of the organization at the moment.
In a statement issued to TechCrunch, Stewart said that the coalition is “transparent” about its members, noting that the members are listed on its website. However, its website isn’t live yet, though it has stated that it includes 10 members, including Google, Civo, Centerprise International, Gigas, ControlPlane, DTP Group, Prolinx, Pulsant, Clairo, and Room 101. “We are not anti any one company, we are a pro-market coalition that advocates for principles that will strengthen the marketplace for cloud services in Europe, mainly openness and interoperability,” Stewart said. “Any company that shares these values and cares about a healthy and thriving marketplace for cloud should join us.”
The backdrop to all of this is a 2019 licensing change where Microsoft made it more expensive to run Microsoft’s enterprise software on rival cloud services. This led the Cloud Infrastructure Services Providers in Europe (CISPE), a European not-for-profit trade association that includes AWS as a member, to file an antitrust complaint with the European Commission (EC), alleging that Microsoft was using its market dominance to tether customers to Azure.
Microsoft settled with CISPE in July, a move designed to keep regulators at bay, with the deal reportedly including a $22 million payment plus stipulations on how Microsoft will better enable some cloud providers to run Microsoft software on their own infrastructure. But notably, this agreement excluded all the major cloud hyperscalers, including AWS, Alibaba, and Google. Subsequently, Google (which was not a member of CISPE) filed a separate antitrust complaint against Microsoft last month, alleging that Microsoft was using anti-competitive licensing practices to force companies into staying on its Azure cloud infrastructure, but only after Google reportedly offered CISPE members €470 million to keep its case against Microsoft alive, which they rejected.
Fast-forward to now, Google is on the verge of launching its version of CISPE, with lobbying the political powers-that-be in Europe at the heart of its mission. The launch also comes as a new European Commission is set to take office by year’s end, while the U.K. is also in the midst of an ongoing market investigation into cloud vendor lock-in practices, with AWS and Microsoft as the main focus of the investigation as market leaders. The investigation is set to conclude in late 2025.
Alaily said that Google’s lobbying efforts are intended to “distract” from regulatory scrutiny it’s facing elsewhere, including in the U.S. where it’s facing a historic break-up over allegedly monopolizing the search and search advertising markets. “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 favor of its cloud services rather than competing on the merits,” Alaily said. A Google spokesperson confirmed its membership of the coalition, adding that it has been “very public” about its issues with Microsoft’s cloud licensing practices. “We and many others believe that Microsoft’s anticompetitive practices lock-in customers and create negative downstream effects that impact cybersecurity, innovation, and choice,” the spokesperson said.
