Google and Microsoft shut down six-year legal ceasefire as infighting and antitrust scrutiny intensifies

Google CEO Sundar Pichai (left) and Microsoft CEO Satya Nadella (right)
Google CEO Sundar Pichai and Microsoft CEO Satya Nadella agreed to drop a number of lawsuits since the pact was signed in 2015. Getty Images
  • Google and Microsoft have brought a long-running non-aggression pact to an end.
  • Tensions between the tech giants have spilled into public view over the past few years.
  • Hostilities resume just as regulators the world over mull how best to tackle tech monopolies.
  • See more stories on Insider’s business page.

Google and Microsoft have brought their six-year legal truce to an end after months of public and private infighting, with onlookers suggesting the breakdown leaves both companies more vulnerable to regulatory pressure.

The two tech giants signed a non-aggression pact in 2015, since which time Google’s then-incoming CEO Sundar Pichai and Microsoft’s recently appointed chief Satya Nadella dialled down the company’s very public rivalry.

Under the terms of the deal, the companies settled a number of outstanding patent lawsuits, agreed to try and resolve disagreements bilaterally before reporting issues to regulators, encouraged partnership on mutual business interests in areas like search and AI, and temporarily stopped executives at both companies openly attacking one another.

But the agreement has been put to the test over the past few years, according to Bloomberg.

In 2019, Microsoft complained that Google’s Search Ads 360 platform, which enables marketers to run advertising campaigns across a number of search engines at once, wasn’t informing users of updates available on its search engine, Bing.

“If you want to advertise, if you want to sell advertising or buy advertising on the internet, you have to use Google’s tools, and when they make their tools in a manner that fails to interoperate easily with others, it impacts everybody,” Microsoft president Brad Smith told Bloomberg.

“We raised the concerns with them and they just turned a deaf ear.”

Tensions spilled out into public view again earlier this year after Google threatened to shut down its search engine in Australia, when legislators briefly considered forcing the firm to pay news publishers to display their stories in its search results.

Microsoft spotted an opportunity, and before long CEO Nadella had enjoyed a one-on-0ne meeting with PM Scott Morrison to discuss how Bing might take Google’s place in Australia were it to pull out. Google senior VP Kent Walker in turn accused the firm of “naked corporate opportunism.”

The Financial Times reports that the legal ceasefire between the two companies expired in April, after neither firm sought to renew it.

Onlookers suggest Microsoft is rolling the dice on having more to gain outside of a pact with Google, particularly in light of the growing number of regulatory probes investigating the latter.

“We have a name for this in antitrust — we call this raising rivals’ costs,” Randal C. Picker, an expert in tech antitrust and copyright at the law professor at the University of Chicago, told Bloomberg.

“All of this is going to cost the Facebooks and the Googles of the world a lot more than it’s going to cost Microsoft. So that makes it look like a competitive move.”

Gus Rossi, a principal of responsible technology at Omidyar Network, told the site that Google may also use the ending of the alliance to its advantage.

“Microsoft is a huge company as well and it’s dominant in many areas. For example, Office is a dominant package in the market,” he said. “What Google can do is to remind everyone that Microsoft is also a bad actor, because if everyone is a bad actor, then you’re not such a bad actor.”

The move comes as regulators around the world continue to announce new antitrust investigations into Big Tech companies – particularly Google – and the means by which they entrench their market position.

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