A long-standing feud between Google (GOOG, GOOGL) and Microsoft (MSFT) is once again thrust into the public eye.
Google’s latest shot came from a complaint filed Wednesday with the European Commission, accusing Microsoft of violating European Union antitrust law.
Google said in a document provided to Yahoo Finance that Microsoft illegally used its dominant licenses for 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 resolved similar concerns from European cloud providers.
“Because we have failed to convince European companies, we expect Google will also fail to convince 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 technology policy group Chamber of Progress, told Yahoo Finance.
‘scrawled’
The two tech giants have spent the past two decades battling for supremacy 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 antitrust lawsuit brought by the U.S. Department of Justice, which alleged it had left out rivals by making its browser free and the default on its dominant Windows operating system .
A 2002 settlement opened the door to broader competition in the Internet browser 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 rapid growth in the 2000s.
Microsoft defended its restored territory in a series of videos first released in 2011, in which Microsoft peppered Google with parodies suggesting that Google’s rival Gmail service, the Chrome browser and associated software lacked quality and privacy.
A video titled “Gmail Man” questioned Google’s ethics by accusing Google of mining every word in the private emails of its Gmail customers to target them with ads.
In other videos titled “Scroogled” and “Googlighting” — a parody of the popular 1980s television series “Moonlighting” — Microsoft questioned whether consumers should trust Google to handle their private data.
In 2016, the companies struck a ceasefire with an agreement to end regulatory complaints against each other worldwide when 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, with Microsoft complaining that Google used unfair tactics to compete in online search and advertising.
‘You brush your teeth and you search on Google’
Things got really awkward last year during a high-profile antitrust case that pitted Google against the US Department of Justice – a case that alleged Google had illegally monopolized the online search engine market and had echoes of the case the DOJ brought in the 1990s filed against Microsoft.
The most prominent witness to testify against Google was Nadella, who did not hesitate to shoot at his rival while he was in the stands.
“You get up in the morning, you brush your teeth and you search on Google,” Nadella said, highlighting Google’s overwhelming dominance of the search engine market.
Nadella said Microsoft’s own search engine, Bing, failed to gain traction because Google negotiated to give Google Search a default placement on browsers, desktops and mobile devices such as Apple’s iPhones and iPads and Android-based smartphones from Samsung and others.
Nadella then described the imbalance as a “vicious cycle” that he feared would intensify with the development of AI.
Google lost the case in a ruling by a judge who called its search business an illegal monopoly. The resolution now awaits a resolution phase that could result in the collapse of Google’s empire.
Microsoft certainly had a lot to gain from defeating Google, Kovacevich said.
“They were probably the main instigator of the US Department of Justice antitrust lawsuit against Google,” Kovacevich said. “And the guilty verdict against Google will likely mainly benefit Microsoft’s Bing.”
Microsoft is taking a similar approach in yet another antitrust case against Google, which is still in its early pilot phase. There it argues that Google’s control over online advertising technologies has damaged the success of its Bing browser.
New feud for the EU
It is unknown whether the EU will adopt Google’s latest attack on Microsoft’s cloud computing rules.
Google claims that Microsoft imposed a 400% markup on customers to migrate their Windows Server licenses to a competing cloud service, while customers who opted for Microsoft’s cloud services, Azure, could migrate for “essentially nothing.”
In making its case, Google is using the same types of “bundling” or “tying” claims as in the 1998 case against Microsoft brought by the DOJ.
At the time, U.S. prosecutors alleged that Microsoft had illegally monopolized the market for personal computer operating systems by using its Windows operating system to give away its browser, Internet Explorer, for free.
This move bundled the browser with Windows, ultimately putting rival browser Netscape Navigator out of business.
Ultimately, Microsoft had to open Windows to third-party software, paving the way for companies, including Google, to “collaborate” or run their browser and search software on Microsoft-powered computers.
Now in the cloud computing market, Google argues that Microsoft has used “dominance in one market to avoid competition on the merits in a separate, unrelated market,” according to the document shared with Yahoo Finance.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.
Click here for the latest technology news that will impact the stock market
Read the latest financial and business news from Yahoo Finance
