Microsoft and Google Say They’ll Play Nice With Each Other

Apr 22, 2016

Maybe even bitter enemies can sometimes find a way to hug it out.

Microsoft (msft) and Google (goog) have decided that they will no longer issue regulatory complaints against each other both in the U.S. and abroad, the companies confirmed to Fortune. The industry giants added, however, that they wouldn't stop competing against each other.

“Our companies compete vigorously, but we want to do so on the merits of our products, not in legal proceedings," a Google spokesperson said in a statement. "As a result, following our patent agreement, we've now agreed to withdraw regulatory complaints against one another."

For its part, Microsoft issued an eerily similar statement, saying that like Google, it plans to compete against the search giant, but not get involved with regulatory complaints.

"Microsoft has agreed to withdraw its regulatory complaints against Google, reflecting our changing legal priorities," the Microsoft spokesperson said in a statement. "We will continue to focus on competing vigorously for business and for customers.”

Re/Code earlier reported on the agreement.

The timing couldn't be better for Google, which is facing serious trouble in the EU.

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Earlier this week, the EU's European Commission (EC) leveled charges against Google over its Android mobile operating system. The EC, which had been investigating Android, charged Google with illegally "preventing competition" in the marketplace. The EC specifically charged Google with requesting manufacturers install its Search and Chrome browser on Android devices in order to use its Play Store, stopping vendors from using other, non-Google versions of Android, and issuing payments to companies and mobile operators for using Google as its default search engine.

“Google pursues an overall strategy on mobile devices to protect and expand its dominant position in Internet search,” Margrethe Vestager, the EU competition commissioner, said at a press conference on Wednesday. “Dominant companies have a responsibility not to abuse their dominant position by restricting competition.”

Vestager added that Google, which has 90% market share in Europe, has created an environment that "hampers the development of viable versions of Android which could develop into credible platforms for competing apps and services."

For its part, Google disagreed with the findings, saying that "Android has helped foster a remarkable—and, importantly, sustainable—ecosystem, based on open-source software and open innovation."

Vestager's complaint, called a statement of objections, could cost Google up to 10% of its global revenue, if it's ultimately found guilty of anti-competitive behavior.

This is the second bit of trouble Google is facing in the EU. Google was charged last year with antitrust behavior by promoting comparison-shopping services in search results. The EU argues Google has given its own shopping services favorable treatment. Google owns 90% of the EU search market, as well.

While the deal between Microsoft and Google has been in the works for the last several months, the timing is rather interesting, if nothing else.

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Microsoft had been one of the more vocal critics of Google's search dominance in the EU, saying that Google was abusing its position as the top search provider in the euro zone. Microsoft was even a member of FairSearch, a coalition of companies that includes travel sites Trip Advisor and Expedia, and the biggest complainant against Google in the EU. Microsoft has left the group, as well as the Initiative For a Competitive Online Marketplace (ICOMP), which was founded in 2008 and includes more than 70 companies from around the world.

While Microsoft faced most of its regulatory troubles before Google, the search giant hasn't been silent about its feelings towards Microsoft. Google and Microsoft have had a contentious relationship over the years and it wasn't uncommon over the years for their former chief executives, Eric Schmidt and Steve Ballmer, to trade barbs.

Now, though, things are different. Under the leadership of Google's Sundar Pichai and Microsoft's Satya Nadella, tensions are cooled and the companies enjoy a far more respectful relationship.

In September, the companies even illustrated that thaw, when they announced they would drop all patent-related lawsuits between them. The companies were at the time engaged in about 20 lawsuits over a wide range of technologies, including mobile phones, wireless connectivity, and Internet video. They added in a statement they would "collaborate on certain patent matters" and likely begin "working together in other areas."

Now, although they'll still compete across a broad spectrum, including operating systems, mobile services, and search, they almost appear to be getting along.

Maybe pigs really can fly.

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