Microsoft says Google is running ‘shadow campaigns’ in Europe in cloud

Microsoft took the unusual step Monday of publicly accusing longtime rival Google of running “shadow campaigns” in Europe designed to discredit the software giant with regulators.

Microsoft lawyer Rima Alaily wrote in a blog post that Google hired a firm to recruit European cloud companies to represent the search company’s case.

“This week an astroturf group organized by Google is launching,” Microsoft lawyer Rima Alaily wrote. “It is designed to discredit Microsoft with competition authorities, and policymakers and mislead the public. Google has gone through great lengths to obfuscate its involvement, funding, and control, most notably by recruiting a handful of European cloud providers, to serve as the public face of the new organization.”

The conflict represents a fresh fight between two companies that do battle in cloud infrastructure as well as online advertising and productivity software.

Google faces heightened regulatory pressure in Europe and in the U.S., where it’s in the midst of its second antitrust trial in a case brought by the Justice Department.

Alaily suggested in Monday’s post that Google hired advisory firm DGA Group to set up the Open Cloud Coalition. One company that opted not to participate in the group told Microsoft that the coalition would receive financial backing from Google and criticize Microsoft’s practices in Europe, Alaily wrote.

Alaily linked to a flyer for the Open Cloud Coalition. The overview in the attached document says the consortium was “being formed to advocate for a fair, competitive and open cloud services industry across the UK and EU.”

DGA Group didn’t provide a comment for this article.

“We’ve been very public about our concerns with Microsoft’s cloud licensing,” a Google cloud spokesperson said in an email. “We and many others believe that Microsoft’s anticompetitive practices lock-in customers and create negative downstream effects that impact cybersecurity, innovation, and choice.”

In September, Google said it was filing a complaint against Microsoft with the EU’s executive body, the European Commission, over what Google considers unfair practices for licensing the Windows Server operating system. Microsoft says on its website that clients can save an average of 36% when they use Windows Server on Microsoft’s cloud instead of on Amazon Web Services.

Amazon leads the cloud infrastructure market over Microsoft and Google.

Alaily said Google has established a pattern of going after Microsoft. Google funded the Coalition for Fair Software Licensing that in 2023 asked the U.S. Federal Trade Commission to investigate Microsoft, Alaily wrote. And she said Google reportedly offered around $500 million to members of another group, Cloud Infrastructure Services Providers in Europe, if they would reject a proposed antitrust settlement regarding Microsoft. The case was ultimately settled in July.

Hours after Microsoft published its blog post, the Open Cloud Coalition announced its launch in a statement that listed Google as a member alongside ControlPlane, Gigas, Pulsant and other companies. The group urges European cloud authorities to be “rigorous and brave” in examining cloud competition issues, according to the statement.

— CNBC’s Ryan Browne contributed to this report.

WATCH: Google Cloud exec says Microsoft is in violation of EU antitrust laws