Microsoft, Google End Regulatory Disputes--Update

By Stephen Fidler and Sam Schechner 

BRUSSELS -- Microsoft Corp. and Google parent Alphabet Inc. agreed to end their yearslong regulatory battles around the world, reflecting the changing relationship between the tech giants.

Microsoft said the move reflected "our changing legal priorities," adding that the two companies would "continue to focus on competing vigorously for business and for customers."

Microsoft has been a prominent complainant about Google to both U.S. and European Union antitrust regulators. In the EU, its complaints to the European Commission were related to the search giant's practices related to advertising and a YouTube app.

A Google spokesman said the move to drop regulatory complaints followed the decision last year to dismiss patent-related lawsuits between the two companies.

"Our companies compete vigorously, but we want to do so on the merits of our products, not in legal proceedings," the spokesman said.

According to a person familiar with the matter, the two companies have agreed to talk to each other first in the future before taking any problems to regulators.

The change reflects the shift in approach that followed Microsoft's 2014 appointment of Satya Nadella as its new chief executive. Mr. Nadella has taken a less combative stance than his predecessor Steve Ballmer, according to a person familiar with the matter.

"The relationship between the two companies has changed," the person said, adding that "Nadella has made most of the difference."

Microsoft's business priorities also have changed, among other things, with the growth of cloud computing.

The relationship between the two companies began publicly to thaw last year as they worked together to settle their long-running patent war involving roughly 20 pending lawsuits, said a person close to Google.

Microsoft also resigned from FairSearch, a group of digital companies -- including Nokia Corp. and Oracle Corp. -- that are prominent Google complainants. In addition, the software maker has discouraged ICOMP, another lobby group of which it was a member, from pursuing Google.

Microsoft's retreat removes a Google adversary that had spent millions trying to make sure Google faced the same regulatory wringer that it had in previous decades. Microsoft had filed complaints against Google and funded industry groups aimed at encouraging regulators to go after Google.

Microsoft was long itself in the EU's crosshairs. A decade and a half of antitrust litigation from the commission led to fines totaling EUR2.2 billion against Microsoft, in a series of complaints that spanned everything from the interoperability of Microsoft's servers to the bundling of its media player and Web browser with its operating system.

--Natalia Drozdiak contributed to this article.

Write to Stephen Fidler at [e-mail] and Sam Schechner at [e-mail]

(END) Dow Jones Newswires

April 22, 2016 11:24 ET (15:24 GMT)

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