The Cold War between Google and Microsoft has “heated up” [Video]

A long-standing feud between Google (GOOG, GOOGL) and Microsoft (MSFT) is once again becoming public.

Google’s latest push came in a complaint filed with the European Commission on Wednesday accusing Microsoft of violating European Union antitrust laws.

Google said in a document shared with Yahoo Finance that Microsoft illegally exploited the licenses of its dominant enterprise server software “Windows Server” to force customers to stick with Microsoft for cloud computing.

Microsoft predicted that Google would “fail” in this case and said it had already addressed similar concerns from European cloud providers.

“As we have not succeeded in convincing European companies, we assume that Google will also not be able to convince the European Commission,” said a Microsoft spokesman.

The new dispute shows “this is a Cold War that has gotten hot,” Adam Kovacevich, CEO and founder of the tech policy advocacy group Chamber of Progress, told Yahoo Finance.

‘Scribbled’

The two tech giants have spent the past two decades battling for dominance in technologies ranging from online search and cloud computing to the markets for operating systems, gaming software, online advertising – and now artificial intelligence, or AI.

The feud began in the first decade after Microsoft settled a landmark U.S. Justice Department antitrust case that claimed the company had eliminated its competitors by making its browser free and defaulting its dominant Windows operating system.

A deal in 2002 opened the door to broader competition in the Internet browser software market and offered Google, then a startup founded by Stanford students Sergey Brin and Larry Page, the opportunity to enjoy a period of meteoric growth in the 2000s start.

Microsoft defended its regained territory in a series of videos, first published in 2011, in which Microsoft skewered Google with parodies that suggested it was inferior in quality and to Google’s rival Gmail service, Chrome browser and related software Data protection is lacking.

A video titled “Gmail Man” questioned Google’s ethics by accusing the company of mining every word in its Gmail customers’ private emails to target them with advertising.

In other videos titled “Scroogled” and “Googlighting” – a parody of the hit 1980s television series “Moonlighting” – Microsoft questioned whether consumers should trust Google to handle their private data.

In 2016, the companies reached a truce, agreeing to end each other’s regulatory lawsuits worldwide, as two new CEOs – Google’s Sundar Pichai and Microsoft’s Satya Nadella – took over.

The pact ended in 2021 as regulators in the US and EU increased pressure on both companies and Microsoft complained that Google was using unfair tactics to compete in online search and advertising.

“You brush your teeth and search on Google.”

Things got really uncomfortable last year during a high-profile antitrust case that pitted Google against the U.S. Department of Justice – a case that alleged Google illegally monopolized the online search market and had echoes of the case the DOJ brought in filed against Microsoft in the 1990s.

The most prominent witness to testify against Google was Nadella, who did not hesitate to take shots at his rival on the witness stand.

“You get up in the morning, brush your teeth and search Google,” said Nadella, emphasizing Google’s overwhelming dominance in the search engine market.

Nadella said Microsoft’s own search engine, Bing, failed to gain traction because Google negotiated for Google Search to have standard placement in browsers, desktops and mobile devices such as Apple’s iPhones and iPads, as well as Android-based smartphones from Samsung and others.

Nadella further described the imbalance as a “vicious circle” that he feared would worsen as AI developed.

Google lost the case after a judge ruled that its search business was an illegal monopoly. The decision now awaits a period of remedial action that could lead to the collapse of the Google empire.

Microsoft certainly could have benefited a lot from a Google defeat, Kovacevich said.

“You were probably the main instigator of the US Department of Justice’s antitrust lawsuit against Google,” Kovacevich said. “And the guilty verdict against Google probably benefits Microsoft’s Bing in particular.”

Microsoft is pursuing a similar approach in another antitrust lawsuit against Google, which is still in the first phase of negotiations. It argues that Google’s control over online advertising technologies has hurt the success of its Bing browser.

New dispute before the EU

It is unknown whether the EU will take up Google’s latest attack on Microsoft’s cloud computing rules.

Google argues that Microsoft charged customers a 400% surcharge to migrate their Windows Server licenses to a competing cloud service, while customers who chose Microsoft’s Azure cloud service could migrate for “essentially nothing.” .

Google is using the same type of “bundling” or “tying” claims as in the 1998 DOJ v. Microsoft case.

At the time, U.S. prosecutors alleged that Microsoft illegally monopolized the market for personal computing operating systems by using its Windows operating system to make its browser, Internet Explorer, available for free.

This move bundled the browser together with Windows, ultimately driving rival browser Netscape Navigator out of business.

Microsoft eventually had to open Windows to third-party software, paving the way for companies like Google to “interoperate” or run their browser and search software on Microsoft-operated computers.

Now, in the cloud computing market, Google argues that Microsoft “exploited dominance in one market to prevent performance competition in a separate, independent market,” according to the document shared with Yahoo Finance.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.

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