Rivals Google and Microsoft end their 5-year ceasefire on legal battles

The leading tech competitors prepare for conflict.

Google CEO Sundar Pichai

In 2015 Microsoft and Google signed a surprising pact which was an agreement not to take their complaints about each other to regulators, preventing legal battles that may arise between the two companies. Stated both by Satya Nadella at Microsoft and Sundar Pichai at Google, they believed the businesses had more to gain from working together rather than pursuing a long legal fight.

However, in April of this year, Google and Microsoft decided to let the unusual pact lapse. The decision not to renew the agreement follows on from regulators globally threatening to challenge practises established by both Google and Microsoft and prevented more open competition.

Before the pact arose, the two CEOs felt that the battle between the leading tech companies – which compete in web search, cloud computing and artificial intelligence – had gotten both expensive and time-consuming, and borderline embarrassing in some circumstances. Revolutionary, Google dominated search engines and digital advertising in the process, leaving Microsoft’s developed Bing in the dust by the time of its release in 2009. In retaliation, in 2012 Microsoft developed an ad campaign titled “Scroogled” which accused Google of employing techniques to boost profits by spying and “screwing” over its users.

The agreement settled that the companies were to not litigate about each other to regulators without first trying to resolve disputes internally. The deal also designed a mutual co-operation for both companies in areas of business interest, leaving previous charges in the past.

Microsoft CEO Satya Nadella

However, there had been evidential cracks that the deal was beginning to erode. Google remains upset at Microsoft due to Microsoft undermining Google’s support of journalism and publishers. In February, a law was passed in Australia that would force Google to pay news publishers for their content just days Google organised a deal with publishers that ensured its services continued in the country. This follows Google’s previous threat to remove the search engine in response to the law, a warning by Google that eventually fell through. Microsoft’s president, Brad Smith, was very public in support of Australia’s new law which was struck as an “attack” articulated by Kent Walker, Google’s head of global affairs in a blog post.

Still, Microsoft and Google, despite the dissolution of the pact and social attacks, have continued to deepen their cooperation in other areas of business as now Microsoft’s Edge browser runs on Google Chromium technology. Furthermore, Microsoft now sells a phone named Duo that uses Google Android as its main operating system that would benefit Microsoft’s position in the smartphone sector against Apple.

- Ella Wotton: Commercial Awareness Officer

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