The long-standing rivalry between Google (GOOG, GOOGL) and Microsoft (MSFT) has escalated into a public dispute, with Google filing a complaint with the European Commission accusing Microsoft of violating EU antitrust laws. In its complaint, Google alleges that Microsoft used its dominant position in enterprise server software—specifically Windows Server—to compel customers to remain with Microsoft for cloud computing services.
Microsoft responded by predicting that Google’s efforts would be unsuccessful, claiming it had already addressed similar concerns raised by European cloud providers. A Microsoft spokesperson stated, “Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission.”
Adam Kovacevich, CEO of the tech policy advocacy group Chamber of Progress, remarked that this dispute signifies “a cold war that’s gone hot.”
A Long-Running Feud
The conflict between these tech giants spans two decades, encompassing various sectors such as online search, cloud computing, operating systems, and artificial intelligence (AI). The feud traces back to the early 2000s, following Microsoft’s settlement of a landmark antitrust case in the U.S., which opened the door for Google’s explosive growth in the online space.
Microsoft has previously launched campaigns against Google, including a series of parodic videos criticizing the security and quality of Google’s services, like Gmail and Chrome. Notable videos, such as “Scroogled,” questioned Google’s handling of user data, further fueling their rivalry.
In 2016, the companies reached a ceasefire agreement, pausing regulatory complaints against each other. However, this truce ended in 2021 as scrutiny from regulators intensified, with Microsoft accusing Google of employing unfair tactics in online search and advertising.
Antitrust Trials and Market Dominance
Tensions peaked during a high-profile antitrust trial in which Google faced allegations of monopolizing the online search market. Microsoft CEO Satya Nadella testified against Google, emphasizing the latter’s dominance in search engine placement on various devices, which he described as a “vicious cycle.”
A ruling in this case determined that Google held an illegal monopoly, with the remedies phase potentially leading to a breakup of the company’s extensive operations. This outcome would likely benefit Microsoft’s Bing, according to Kovacevich, who noted Microsoft’s strong interest in the case.
Microsoft is also pursuing a separate antitrust lawsuit against Google, alleging that Google’s control over online advertising technologies has negatively impacted Bing.
New EU Complaint
In its latest move, Google claims that Microsoft has imposed a 400% markup on customers migrating their Windows Server licenses to other cloud services, while those using Microsoft’s Azure can transition at little to no cost. Google argues this practice mirrors the “bundling” tactics that led to Microsoft’s antitrust challenges in the late 1990s.
This latest complaint echoes past allegations where Microsoft bundled its Internet Explorer browser with Windows, effectively sidelining competitors like Netscape Navigator. Google asserts that Microsoft is leveraging its dominance in one market to stifle competition in another.
As the situation unfolds, it remains uncertain how the European Union will respond to Google’s latest allegations against Microsoft.
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