Mutually Assured Destruction: Google and Microsoft Turn Up the Heat on Each Other

The Montagues and the Capulets. The Hatfields and McCoys. Measure for measure. An eye for an eye. The Roadrunner vs Wile e Coyote. And for those who remember Mad Magazine, Spy vs Spy.

History is replete with tales of ancient blood feuds in which the enmities were so deeply ingrained that they continued even though the origins might have been forgotten. As news of Google's and Microsoft's malevolent minuet becomes more available, we are reminded of Sean Connery's memorable role as Jim Malone in the movie 'The Untouchables.' He played a 1920s era Chicago lawman involved in the battle to bring gangster Al Capone to justice. Said Malone to his boss, Elliot Ness, "You wanna know how to get Capone? They pull a knife, you pull a gun. They send one of yours to the hospital, you send one of theirs to the morgue. That's the Chicago Way."

Seems like old times, only now its the Mountain View Way vs the Redmond Way. Take your pick. Google rats out Microsoft to European Union regulators who slap MSFT with a $730 million fine for monopolistic practices. Meanwhile, Microsoft quietly sponsorts privacy legislation to thwart Google's effort to gather information on school children. Neither firm is on the side of the angels and both have a lot to lose.

This is not usually how it plays out in tech, where disputes and competition are played out in a more business-like and, usually, more subtle fashion. But it's getting down to the nut-cutting, as they say, and with four or five major players left - Apple and Amazon in addition to Google and Facebook - with Microsoft generally considered an also-ran whose best days are behind it.

Fighting for position and dominance has intensified the rivalries, but particularly for Microsoft whom the others appear to regard as vulnerable and whose franchise, therefore, may be more easily captured. But Microsoft, for all its missteps and false starts, retains a huge cash war chest and a formidable talent array. The key for these companies is not to become distracted by minor skirmishes not essential to the grand strategic battle for overall dominance. What this latest contretemps may demonstrate is that, for the time being, no issue is considered too small or too remote as they maneuver for advantage. The greatest threat may be that pursuing their foes, they inadvertently expose themselves to even greater damage. For most of the historical enemies named above, victory, if it came and could be called that, was often empty. JL

Addy Dugdale reports in Fast Company:

The rivalry between the two firms has grown intense. The massive $730 million fine by the E.U. for Microsoft's monopolistic business practices as regards its IE browser and, previously, Windows (to add to its tax woes in Denmark), was seen by some as a veiled warning to Google to pull its business practice socks up in the old continent. In fact, the Financial Times revealed that the fine came about via a tip-off from Google, news which will only ramp up the dagger looks between the pair.

Microsoft has admitted that it is behind privacy legislation in Massachusetts to outlaw the commercial use of schoolkids' data gathered from their use of public school computers. The Redmond-based firm has also come clean about the fact that its real target is Google, whose Apps for Education software is snapping at the heels of Microsoft's Office suite.
MA Bill 331, which was introduced in January and is currently being referred to the legislature's joint education committee, wants to prohibit firms with an educational cloud computing service from using the children's data for either advertising or other commercial purposes.
The news of the bill's origins worry campaigners for children's rights, however. Josh Golin, associate director of the Campaign for a Commercial-Free Childhood said, "We'll still look at the legislation on its merits, but the origins of the bill are troubling."
Microsoft spokesman Mike Houlihan told the Wall Street Journal, "We believe that student data should not be used for commercial purposes; cloud-service providers should be transparent in how they use student data; and that service providers should obtain clear consent for the way they use data. We expect that students, parents and educators will judge any proposed legislation on its merits."