Until recently, major U.S. technology companies only competed in very limited markets. They all do business with data, but Meta has extracted it from its social networks, Apple from its devices, Amazon from its online marketplace, Google from its digital life tools and Microsoft from its Windows and office applications, mainly. These walled gardens have maintained lasting peace between digital empires. A peace that the business of cloud computing and artificial intelligence, which everyone wants to get their hands on, is breaking.
This Tuesday, Microsoft accused Google of having launched a false campaign to turn competition authorities against it. This is an unprecedented event in the industry due to the direct and formal nature of the statement and the fact that it occurs between the two main companies whose activities have started to overlap due to AI , cloud computing and data centers.
“This week, an artificial group organized by Google is launched. Their goal is to discredit Microsoft among competition authorities and policymakers and to mislead the public. “Google went to great lengths to conceal its involvement, funding and control, including recruiting a handful of European cloud service providers to act as the public face of the new organization,” said Rima Alaily, vice president from Microsoft. the official company blog.
“When the group launches, Google, as we understand it, will likely present itself as a supporting member rather than its leader. “It remains to be seen what Google offers small businesses to join, whether in terms of money or discounts,” he added.
The group Microsoft is referring to is the Open Cloud Coalition, a lobbying group launched on Tuesday that bills itself as a new “alliance of cloud service providers and users” that seeks to “promote openness, interoperability and fair competition” in this market. In his official statement, he predicts that he will seek to contact EU and UK competition authorities to adopt “rigorous and courageous” decisions in their ongoing review of the cloud sector.
Microsoft calls the Coalition a “ghost campaign” orchestrated by Google with “astroturfing” tactics. This term refers to a brand of artificial grass and is used to refer to influence operations that claim to arise from below, carried out organically by users or small businesses, when in reality they are orchestrated by large companies or powers. The company founded by Bill Gates accuses Google of being this black hand.
“Because? I suspect it has a lot to do with the fact that Google is facing a reckoning,” says Rima Alaily in reference to the monopolistic conviction that weighs on Google and which could result in its disintegration into several companies.
“Never in the past two decades have Google’s monopolies in search, digital advertising and mobile app stores faced such a concerted and determined threat as they do today. By our count, there are at least 24 antitrust investigations against Google across the world’s major digital markets. At a time when Google should be focused on solving legitimate problems with its business, it is instead devoting its enormous resources to tearing down others. “It is disappointing that, while the foundations of their business are in danger, they have attempted to strengthen their cloud computing service (Google Cloud Platform) by attacking ours,” says the Microsoft vice president.
Formal accusation and silence from Google
Representatives of the group denied Microsoft’s accusations in a communication with elDiario.es. “The Open Cloud Coalition is transparent about its members, who are listed on our website. We are not against any company, we are a pro-market coalition focused on defending the principles that will strengthen the cloud services market in Europe, primarily openness and interoperability,” said Nicky Stewart, one of their spokespersons.
“Any company that shares these values and cares about a healthy and prosperous market for the cloud should join us,” added the same spokesperson. Sources within the group point out that its origins date back to Stewart’s own experience at UKCloud, a cloud services provider founded in 2011 and specializing in serving the UK public sector, including organizations such as the NHS and the Department of Health. Defense.
Microsoft’s direct accusation has not yet received a response from Google.
Crossfire
The two multinationals have been increasing tensions between them since the “we will make them dance” uttered by Satya Nadella, the CEO of Microsoft, after his alliance with OpenAI. The first goal of the deal was to integrate ChatGPT technology into its Bing search engine, a move that ultimately had no impact on Google’s search engine market share, but showed that Microsoft had its rival in its growth strategy.
A few months later, Nadella was one of the main executives who testified against Google in the monopoly charge that ended with a judgment against it for its practices in the search engine and digital advertising market. Google appealed this decision.
Google fought back by filing a formal complaint in September with the European Commission against Microsoft’s licensing practices, alleging they were anti-competitive and harmed European businesses. Its cloud services division argues that Microsoft’s restrictive licensing practices force customers to use its Azure cloud platform even if they prefer others, such as Google’s, again depending on their version.
This is not the first time that Microsoft has received an accusation in this regard. In May, the main association of Spanish startups, which brings together some 700 of these emerging companies, singled out the multinational for its “restrictive practices observed in the cloud services market” which “would impose artificial barriers limiting the ability of startups to compete fairly and competitively.
