The European cloud war is now heating up with an interesting twist. The world's largest software company accused old enemy Google of secret, targeted warfare against Microsoft's Azure cloud company-with an ulterior motive-to garner good will among Europeans with policymaking and antitrust authorities.

In a blog post today, Microsoft deputy general counsel Rima Alaily pre-leaked the impending launch of a new lobby group known as the Open Cloud Coalition, which includes Google and several smaller cloud providers. The outfit is an "astroturf group organized by Google," Alaily charges, arguing that Google "has gone through great lengths to obfuscate its involvement, funding, and control" by making some smaller European cloud providers its public face.

"When the group launches, Google, we understand, will likely present itself as a backseat member rather than its leader," Alaily writes. "It remains to be seen what Google offered smaller companies to join, either in terms of cash or discounts."

The Coalition is led by Nicky Stewart, public sector director of U.K. cloud hosting company Civo. According to a document for the initiative, which Microsoft published today, DGA Group-a global "advisory firm"-led the recruitment effort. DGA confirmed to TechCrunch that the coalition will officially launch Tuesday, October 29. Responding to a question from TechCrunch, a DGA spokesperson said that it wouldn't be revealing the funding composition of the organization at this time.

In a statement provided to TechCrunch, Stewart commented that the alliance is transparent about its membership and is open in letting its constituents know who makes up that membership: It is a list on the site and has included the members within its own ten which happen to be made of, Google, Civo, Centerprise International, Gigas, ControlPlane, DTP Group, Prolinx, Pulsant, Clairo, Room 101.

"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," Stewart said. "Any company that shares these values and cares about a healthy and thriving marketplace for cloud should join us."

Settlement
The backdrop to all this is a 2019 licensing change in which Microsoft made it more expensive to run Microsoft's enterprise software on rival cloud services. The Cloud Infrastructure Services Providers in Europe, a European not-for-profit trade association that counts AWS as a member, retaliated by filing an antitrust complaint with the EC claiming that Microsoft was abusing its market power by bundling customers into Azure.

Microsoft settled with CISPE in July, something that was meant to bring regulators off its back - the deal reportedly includes a US$22 million payment alongside stipulations on how better to enable some cloud providers to run Microsoft software.

What is perhaps most significant about the settlement is that it cut out all the hyperscale cloud providers — namely, AWS, Alibaba, and Google. A month later, Google took its cue, filing a complaint against Microsoft on other antitrust grounds, charging the software company with anti-competitive licensing terms forcing companies to hold them on its Azure cloud infrastructure — only after the Financial Times reported that Google offered CISPE members an incentive of €470m to keep their case with Microsoft alive (which they turned down).

Fast forward to now, and Google is on the verge of its own version of CISPE, lobbying the political powers-that-be in Europe forms the core of its campaign. And just in time with the new European Commission likely to come in by the year's end, the U.K. It is also examining cloud vendor lock-in practices under an ongoing market investigation that focuses primarily on AWS and Microsoft since they are the dominant players in the market. The investigation will be completed late in 2025.

Alaily said that the Google lobbying efforts are to "distract" from the regulatory scrutiny it is facing in other areas, including the U.S., where it is facing a historic break-up over allegations of monopolizing markets in search and search advertising.

It would seem Google has two primary objectives behind its astroturfing: to discredit Microsoft enough to take public heat off its intense regulatory scrutiny around the world and try to adjust the regulatory playing field so that Google Cloud Services end up winning through regulatory decision rather than a fair, competitive playing field," Alaily said.

Google confirmed that it is part of the coalition. A company spokesperson mentioned that they have been very public with their concerns on Microsoft's cloud licensing practice.

We and many others believe that these anticompetitive practices lock-in customers and lead to negative downstream effects related to cybersecurity, innovation, and choice, a Microsoft spokesperson said.