Yes, there exist review processes by peers, and yes, your institution can choose to exercise veto power. The scientific process of "peer review" is a very specific thing. (My code is not "peer reviewed" in the scientific sense simply because a teammate, a peer, reviewed my pull request.) So saying the paper was not good enough for peer review is misleading.
And yes, Google can veto any paper. That's not the issue. The issue is they chose to use their veto power to block a paper that did not sufficiently praise Google. That means no paper coming out of Google can be trusted, because it's not the output of researchers but also management. Does Spanner work? Maybe there were some negative examples that were deemed too embarrassing to Google and removed.
I don't know, maybe you already acted as if no paper coming out of Google could be trusted, and you were smarter than the rest of is in that regard. But a lot of people act as if their papers are trustworthy and not propaganda (e.g., https://blog.acolyer.org/2015/01/08/spanner-googles-globally... takes the Spanner paper as if it were a legitimate scientific paper). Want to tell them they need to stop?