Yes, the scenario you seem to be imagining is logically impossible.
Microsoft can't just block traffic to random URLs before they emerge as a dominant player somewhere. The course of action only makes any sense if Google has already achieved dominance.
Could Microsoft shake a website's existing dominance by blocking web traffic to it at the OS level? Of course not.
All Microsoft would need to do is keep an eye out for potential competition and start blocking them. More than that, if Microsoft was going to that sort of extreme, they could start tracking URLs that their users go to. Anything that starts to get popular would be investigated and blocked if it was a threat.