Microsoft Accuses Google of Massive Astroturf Campaign (Updated)

UPDATE: Google has responded to Microsoft’s accusations, so I’ve added a quote to the end of this post. –Paul

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Google has been quite vocal in its criticism of Microsoft’s cloud licensing policies in Europe, but there’s apparently more to this story. This week, the software giant finally fired back, accusing Google of using small European cloud companies, EU regulators, and many others as pawns in its competition with Microsoft.

“This week an astroturf group organized by Google is launching,” Microsoft deputy counsel Rima Alaily writes in the Microsoft on the Issues blog. “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. When the group launches, Google, we understand, will likely present itself as a backseat member rather than its leader. It remains to be seen what Google offered smaller companies to join, either in terms of cash or discounts.”

That is a serious list of accusations, but it’s only the tip of the iceberg.

(For those unfamiliar, “astroturf” means any activity that’s designed to give the false impression that a grassroots organization has spontaneously arisen to oppose something when in fact it was secretly organized by a competitor or political enemy to discredit that thing.)

In Microsoft’s view, Google has spent the past few years waging a proxy war against Microsoft because it’s not competitive in cloud computing. It attempted to “weaponize” smaller cloud vendors against Microsoft via the Cloud Infrastructure Services Providers in Europe (CISPE) trade group, and when that group agreed to settle with Microsoft, Google tried to pay them off to continue the legal battle. CISPE declined Google’s offer, however, and so now it’s trying a new tactic.

“Google is facing a reckoning,” Alaily adds. “By our count, there are at least 24 antitrust investigations against Google in the leading digital markets around the world. At a time when Google should be focused on addressing legitimate questions about its business, it is instead turning its vast resources towards tearing down others. It is disappointing that, with the foundation of their business facing jeopardy, they have sought to bolster their cloud computing service – Google Cloud Platform – by attacking ours.”

According to Microsoft’s Google’s astroturfing campaign against it has multiple components: It hired a lobbying and communications agency in Europe to create and operate a new organization to replace CISPE. It is funding industry commentators and academics to attack Microsoft and author “studies” it can cite to discredit Microsoft. It is lobbying regulators “around the world to intervene and impose restrictions on its hyperscale cloud competitors, but not itself. And in its only public move, it specifically filed a complaint with EU regulators about Microsoft’s software licensing practices.

“Fundamentally, Google’s argument is that it should not have to pay Microsoft when it builds and offers cloud services using our intellectual property – namely Windows Server – if customers have otherwise purchased the same software for a very different use, i.e., on their own server,” Alaily says. “We disagree. When a streaming service, like Netflix or Disney, includes a movie in their service, they pay for that right. They don’t get a credit or discount if a subscriber happens to own a DVD of the same movie. Software and the cloud are no different.”

Microsoft has direct evidence of each of these accusations, which you can see in the original post. And it is calling out Google’s involvement–always in secret and sometimes through third parties–with organizations, publications, and others that allegedly oppose Microsoft.

“Google is less concerned about Microsoft’s conduct in the cloud market than it is with discrediting a competitor wherever it can get a foothold,” Alaily continues. “We will continue to listen and evolve when we hear credible, legitimate, and addressable concerns, but as Google continues to demonstrate with its actions, the arguments it wants you to believe are none of these.”

Google responded to the accusations, noting that it is clearly listed as a member on the OCC website and pointing to a blog post in which it publicly supports the Coalition for Fair Software licensing, support that Microsoft said was hidden.

“We’ve been very public about our concerns with Microsoft’s cloud licensing,” a Google Cloud spokesperson told me. “We and many others believe that Microsoft’s anticompetitive practices lock-in customers and create negative downstream effects that impact cybersecurity, innovation, and choice. You can read more in our many blog posts on these issues.”