A long-running dispute between Google (GOOG, GOOGL) and Microsoft (MSFT) is coming to light once again.
Google’s latest shot came in a complaint filed with the European Commission on Wednesday, accusing Microsoft of violating European Union antitrust law.
Google said in a document provided to Yahoo Finance that Microsoft illegally leveraged its dominant “Windows Server” enterprise server software licenses to force customers to stick with Microsoft for cloud computing.
Microsoft predicted that Google will “fail” in this case, saying it had already resolved similar concerns raised by European cloud providers.
“Having failed to persuade European companies, we hope that Google will also fail to persuade the European Commission,” a Microsoft spokesperson said.
The new dispute shows that “this is a cold war gone hot,” Adam Kovacevich, CEO and founder of the tech policy advocacy group Chamber of Progress, told Yahoo Finance.
‘Scroogled’
The two tech giants have spent the last two decades fighting for supremacy in technologies ranging from online search and cloud computing to markets for operating systems, gaming software, online advertising and now artificial intelligence, or AI.
The dispute began in the first decade after Microsoft settled a landmark antitrust case brought by the US Department of Justice, alleging that it had excluded rivals by making its browser free and the default on its dominant Windows operating system.
A 2002 deal opened the door to broader competition in the Internet browsing software market and created an opportunity for Google, then a startup formed by Stanford students Sergey Brin and Larry Page, to begin its period of meteoric growth. in the 2000s.
Microsoft defended its reestablished territory in a series of videos first published in 2011, in which Microsoft criticized Google with parodies that suggested the Gmail service, the Chrome browser and accompanying software lacked quality and privacy.
A video titled “Gmail Man” questioned Google’s ethics by accusing it of scraping every word from its Gmail customers’ private emails to target ads at them.
In other videos titled “Scroogled” and “Googlighting” – a parody of the hit 1980s TV series “Moonlighting” – Microsoft questioned whether consumers should trust Google to handle their private information.
In 2016, the companies signed a ceasefire agreement to end regulatory complaints against each other globally when two new CEOs, Google’s Sundar Pichai and Microsoft’s Satya Nadella, took over.
The pact came to an end in 2021 as US and EU regulators increased pressure on both companies and Microsoft complained that Google used unfair tactics to compete in online search and advertising.
‘You brush your teeth and search on Google’
Things got really awkward last year during a high-profile antitrust trial that pitted Google against the U.S. Department of Justice, a case that alleged Google illegally monopolized the online search engine market and had echoes of the case that the Department of Justice brought against Microsoft in the 1990s.
The most prominent witness to testify against Google was Nadella, who did not hesitate to shoot his rival while on the stand.
“You get up in the morning, you brush your teeth and you search on Google,” Nadella said, emphasizing Google’s overwhelming dominance of the search engine market.
Nadella said Microsoft’s own search engine, Bing, failed to gain traction because Google had negotiated for Google Search to get a default placement on browsers, desktop computers and mobile devices such as Apple’s iPhones and iPads and based smartphones. on Android manufactured by Samsung and others.
Nadella went on to describe the imbalance as a “vicious cycle” that he worried would intensify with the development of AI.
Google lost the case in a judge’s ruling that called its search business an illegal monopoly. The resolution is now pending a remedies phase that could result in a breakup of Google’s empire.
Microsoft certainly had a lot to gain from a Google defeat, Kovacevich said.
“They were probably the main instigators of the US Department of Justice’s antitrust lawsuit against Google,” Kovacevich said. “And the guilty verdict against Google will likely benefit Microsoft’s Bing more than anyone else.”
Microsoft is taking a similar approach in another antitrust lawsuit against Google that is still in its early testing phase. There it is argued that Google’s control over online advertising technologies has harmed the success of its Bing browser.
New dispute before the EU
It is unknown whether the EU will accept Google’s latest attack on Microsoft’s cloud computing rules.
Google argues that Microsoft imposed a 400% markup on customers to migrate their Windows Server licenses to a competing cloud service, while customers who chose Microsoft’s cloud service, Azure, could migrate for “practically nothing.”
In bringing its case, Google is using the same type of “bundling” or “tying” claims used in the 1998 case against Microsoft brought by the Department of Justice.
At the time, US prosecutors alleged that Microsoft illegally monopolized the market for personal computing operating systems by using its Windows operating system to give away its browser, Internet Explorer.
The move included the browser alongside Windows, ultimately putting rival browser Netscape Navigator out of business.
Microsoft was eventually required to open Windows to third-party software, paving the way for companies like Google to “interoperate,” or run their browser and search software using Microsoft-powered computers.
Now, in the cloud computing market, Google argues that Microsoft took advantage of “dominance in one market to prevent competition on the merits in a separate and unrelated 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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