Microsoft just ramped up its cloud rivalry with Google by accusing it of 'shadow campaigns'

• Microsoft has accused Google of undermining its business with "shadow campaigns."
• The company alleged Google formed a group to influence cloud regulation in Europe.
• Microsoft leads Google for cloud market share, while Amazon Web Services is top.

Microsoft has publicly accused Google of running "shadow campaigns" to undermine its business and influence cloud regulation in Europe in an escalation of the tech giants' rivalry.

In a blog post shared on Monday, Microsoft's deputy general counsel, Rima Alaily, accused Google of designing a group — called the Open Cloud Coalition — to tilt the regulatory landscape in favor of its own cloud services.

The new lobby group includes Google and several smaller cloud providers.

"This week an astroturf group organized by Google is launching," Alaily wrote in the post. "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."

A Google spokesperson told Business Insider the company had been "very public" about concerns with Microsoft's cloud licensing.

"We and many others believe that Microsoft's anticompetitive practices lock in customers and create negative downstream effects that impact cybersecurity, innovation, and choice," a Google Cloud spokesperson said.

Nicky Stewart, a senior Advisor to the Open Cloud Coalition, told Business Insider the group is "transparent" about its members.

"We are not anti any one company, we are a pro-market coalition that is focused on advocating for principles that will strengthen the marketplace for cloud services in Europe, principally openness and interoperability. Any company that shares these values and cares about a healthy and thriving marketplace for cloud should join us," Stewart said in response to questions about Microsoft's blog post.

Cloud wars

Microsoft's decision to publicly accuse Google is an unusual step that could signal intensifying tensions between the two old rivals.

Last month, Google filed an antitrust complaint against Microsoft with the European Commission, alleging the company was using anti-competitive licensing practices to force companies to stay with its Azure cloud infrastructure.

The rival Big Tech companies compete in various markets, including cloud infrastructure, search, AI, and productivity software.

But Microsoft has historically beaten Google for cloud sales.

In the second quarter of 2024, Google Cloud generated $10.35 billion in revenue, while Microsoft's Azure, included as part of the company's Intelligent Cloud group, reported $28.5 billion in revenue.

In 2023, Google Cloud generated $33.7 billion in sales, while Microsoft's Intelligent Cloud group reported $96.8 billion in sales. Amazon Web Services, the e-commerce giant's cloud business, is the leading provider by market share.

Alaily also accused Google of attempting to distract from regulatory scrutiny the company faces following recent antitrust rulings.

In the US, the Department of Justice is considering asking a judge to break up Google, months after a federal judge ruled that the company violated antitrust law with its search engine.

The Big Tech company has also faced antitrust scrutiny over its Android app store. In a recent ruling in Epic Games' blockbuster antitrust case, a judge ordered Google to open up Android to rival third-party app stores. Google has said it plans to appeal the ruling.