Cloud: Microsoft Criticizes Google’s Lobbying Efforts in Brussels

Cloud: Microsoft Criticizes Google's Lobbying Efforts in Brussels

The Open Cloud Coalition (OCC) has launched as a new lobby group in Europe, aiming to promote competition and innovation in the cloud market amid increasing regulatory scrutiny. Comprising ten members, including Google Cloud and several smaller providers, the OCC plans to publish research to guide regulators. However, Microsoft claims the coalition is a deceptive maneuver by Google to undermine its market position and influence EU competition authorities. Tensions escalate as Google seeks to challenge Microsoft’s practices.

On Tuesday, the European cloud landscape welcomed a new lobbying entity: the Open Cloud Coalition (OCC). In its inaugural announcement, the OCC describes itself as “a new alliance of leading cloud providers and users.” Its primary goal is transparent, aiming to “ensure that the cloud ecosystem stays competitive and innovative” across the UK and EU.

The OCC plans to release cloud market research intended to “inform” regulators in these regions and “promote a dynamic and competitive cloud market.” The establishment of this coalition comes at a crucial time, as regulatory scrutiny continues to heighten.

Escalating Regulatory Scrutiny

Discussions in Brussels are currently focused on the establishment of a future European certification initiative for cloud services. This EU certification scheme aims to create a unified certification across member states, replacing national systems such as France’s SecNumCloud. In the final deliberations, the criterion of sovereignty may be overlooked, potentially disadvantaging reliable national cloud solutions.

In London, the Competition and Markets Authority (CMA) is investigating potential anti-competitive behaviors among leading cloud providers, a probe that could significantly alter the industry dynamics, according to the OCC.

The coalition has been founded with ten initial members. Among the “leading” participants, only Google Cloud is prominent, while other members include smaller providers like Centerprise International, Civo, and Room 101 Gigas, alongside consulting firms such as ControlPlane, DTP Group, Prolinx, and Clairo, as well as the data center operator Pulsant. This group includes seven companies from the UK and two from Spain.

Representing Google Cloud on the coalition’s executive committee is Benoît Tabaka, who oversees institutional relations and public policy for Google France, and serves as the acting director of public affairs for Google Cloud in Europe.

Claims of Manipulation

Microsoft has expressed skepticism about the OCC, asserting that it serves as a guise for Google. Rima Alaily, the head of the Competition and Market Regulation team at Microsoft, stated in a blog entry that the coalition represents an astroturfing initiative aimed at “discrediting Microsoft in the eyes of competition authorities and policymakers while misleading the public.

Alaily alleges that “Google has made considerable efforts to mask its involvement, funding, and influence, including enlisting a select few European cloud providers” to lend legitimacy to the coalition. She questions the potential benefits these “small companies” received in exchange for their participation.

Alaily escalates her allegations by stating that “One firm that was approached but ultimately turned it down indicated that Google would lead and finance the organization primarily to undermine Microsoft’s cloud operations in the EU and the UK.

Google’s Influence on Cispe

The situation between these two American cloud giants has grown particularly strained. On September 25, Google Cloud announced it would file a complaint with the European Commission over Microsoft’s allegedly anti-competitive software licensing tactics.

Reports indicate that Microsoft’s contractual stipulations inhibit organizations from transferring their workloads from Azure to competing services, with Windows Server purportedly used to keep clients locked in, imposing “significant financial penalties on those trying to utilize Windows Server software on rival clouds.

Alaily believes the OCC’s formation follows Google’s unsuccessful attempt to manipulate another group, Cispe (Cloud Infrastructure Services Providers in Europe), which includes members like Amazon Web Services and France’s Clever Cloud, Outscale, and Ikoula.

While Cispe was in negotiations for an out-of-court settlement with Microsoft to drop its complaint to European regulators, Bloomberg reported that Google allegedly offered Cispe members €470 million to withdraw from the settlement and continue their lawsuit against Microsoft. Ultimately, a resolution was reached between Microsoft and Cispe in July.