Policy

The detente between Microsoft and Google is over. Here's why Microsoft is fighting again.

It's a PR battle that Brad Smith is determined to win.

The detente between Microsoft and Google is over. Here's why Microsoft is fighting again.

Smith testified before the House Judiciary Committee last week.

Photo: Kent Nishimura/Getty Images

After spending several years fighting its rivals behind the scenes in Washington, Microsoft is ready to go public again.

Under former CEO Steve Ballmer, Microsoft was an unabashed fighter, regularly using the power of regulation and loud PR to sting its rivals — mainly, Google — and inflate its own importance. That changed under CEO Satya Nadella, who has encouraged the company to stay heads-down developing products while continuing closed-door conversations with regulators in the U.S. and worldwide, according to current and former executives from both companies.

But Brad Smith's testimony before Congress last week, and the company's public scrapes with Google, appear to mark an end to the cautious detente Microsoft and Google reached in 2016, the executives said.

"It's about time," said Stefan Weitz, the former Microsoft executive who was instrumental in Microsoft's highest-profile campaigns against Google. "I felt like they got away from this for the last several years. And it's kind of fun to see them throwing their weight and significant clout behind an issue."

This time around, Microsoft is bashing Google over its control over the news business, a hot-button issue that came to a head in Australia earlier this month and has caught the attention of policymakers in the U.S. Microsoft came out publicly in support of Australia's controversial law that allows news publishers to negotiate with Google and Facebook over sharing content, and Smith testified in support of similar legislation before the House Judiciary Committee.

It's a win-win for Microsoft, said Frank Shaw, Microsoft's longtime spokesman and a key player in the "Scroogled" years.

"Every once in a while, you get what you think about as these flash moments that change the environment, where people see things differently," Shaw told Protocol. "Google created its own flash moment in Australia ... 'Journalism is in trouble and Google is responsible, in part.'"

"Of course we compete with Google; we have a search engine," Shaw said. "We saw [speaking out] as an opportunity to align our business interests and something we also care about."

Google declined to comment beyond last week's blog post, in which Google's senior vice president of global affairs Kent Walker called Microsoft's interest in the news issue "self-serving" and claimed Microsoft is trying to deflect from its role in the SolarWinds hack.

Of course, it's not all about Bing, which is hardly central to Microsoft's business model. Microsoft and Google compete across a wide variety of areas — search, office products, apps, internet browsers and, perhaps most importantly, cloud.

But the news fight could be best understood as the most public prong of Microsoft's broader campaign to paint itself as the most responsible large tech company, riding the wave of the post-2016 techlash and unprecedented antitrust scrutiny against its competitors with the intention of coming out on top. Just as Smith is advocating for a law that would allow news organizations to negotiate with Google and Facebook, he's also calling for Section 230 reform. And Microsoft is quietly assisting the DOJ and states in their antitrust suits against Google. In other words, Microsoft is increasingly going for all of Google's Achilles' heels. "Microsoft has done a terrific job in recent years of holding itself out as and acting as a more responsible tech company," said Alan Davidson, Google's former top policy executive who opened and headed its D.C. office.

Microsoft's policy team has been aggressively positioning Smith as an ethical tech leader, in stark contrast to Mark Zuckerberg and Jeff Bezos. And it seems to be working, as progressives and lawmakers welcome Smith's firepower with open arms. Rep. Pramila Jayapal, a leading progressive in Congress, kicked off last week's hearing by thanking Smith for his involvement in the issue.

"I don't know why Smith is testifying except that Microsoft is big and powerful," tweeted Matt Stoller, a leading progressive antitrust scholar and director of research at the anti-monopoly American Economic Liberties Project. "But ok, I'm fine with it."

"I wish I had this support [from progressives] back when I was running these campaigns," Weitz said.

The irony isn't lost on those who have been involved in the decades-long policy battle: The government's 1990s antitrust case against Microsoft set the stage for the cases pending against Google and Facebook now.

In the early 2000s, when Microsoft and Google were first beginning to spar, the dynamic was completely different. Google was the upstart disruptor and Microsoft was a powerful institution protecting its turf. But Google is no longer an upstart, and its posture has changed accordingly. "Google's primary posture in business is disruptive," said Adam Kovacevich, Google's former policy head, "and its primary posture in politics is defensive."

As Google continued to grow, Microsoft, which was known for picking fights with rivals, battened down the hatches. Microsoft funded an anti-Google trade group in Europe and FairSearch, a consortium of search groups that raised antitrust concerns with Google in the U.S. It spoke to regulators around the world about Google's position in search and worked relentlessly behind the scenes to agitate against Google's products, at one point helping to blow up a proposed deal between Yahoo and Google.

Google often hit back. In 2011, as Microsoft launched a showcase to promote Bing and insult Google's "spammy" search results, Google launched one of its most memorable counter-attacks: It publicized evidence that showed Bing was scraping Google's search results.

Weitz said he was the one who invited Matt Cutts, Google's search spam prevention head, to a Microsoft conference about Bing. "We put together this event to showcase the future of search," he said. "And Matt runs in with a laptop and is showing the journalists evidence that we copied their search results."

The rivalry only intensified as Microsoft launched its legendary "Scroogled" ad campaign, hitting Google over its privacy policies. At one point, Microsoft devoted a section of its online store to "Scroogled" merchandise, including a mug that read, "Keep calm while we steal your data."

The companies fought heated patent and antitrust battles, in court and in policymakers' offices — until they agreed to withdraw their regulatory complaints against one another in 2016.

Now, the two companies are positioning themselves for another public war, just as Google faces unprecedented levels of pressure from governments around the world and Microsoft seeks to stay relevant.

"On some level, you could say, 'Why should anybody care about two big companies fighting it out? They both have a lot of resources and armies of lobbyists. How much does it really matter if they're fighting this thing out?'" Davidson said.

But he said it's ultimately a fraught gamble. "I think we should care when consumers are caught in the crossfire," he said. "There's the saying: 'When elephants fight, it is the grass that suffers.' We should be careful not to let policy decisions be driven by intramural fighting between big companies."

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