Microsoft Comes Out Of Shadows With EU Antitrust Complaint Against Google
In the past Microsoft has been accused of orchestrating third party legal complaints against Google like some behind-the-scenes Cardinal Richelieu or puppet master. But now Redmond has come out of the shadows and joined the list of companies that have filed formal complaints against Google in Europe.
“Microsoft is filing a formal complaint with the European Commission as part of the Commission’s ongoing investigation into whether Google has violated European competition law,” wrote Microsoft SVP and General Counsel Brad Smith.
He goes on in is explanatory missive to lay out the particular issues and complaints that the company has against Google (however not exhaustively apparently). Many of those mentioned are focused on access to YouTube content.
The Specific Complaints
Here they are in abbreviated form:
- First, in 2006 Google acquired YouTube—and since then it has put in place a growing number of technical measures to restrict competing search engines from properly accessing it for their search results.
- Second, in 2010 and again more recently, Google blocked Microsoft’s new Windows Phones from operating properly with YouTube . . . Unfortunately, Google has refused to allow Microsoft’s new Windows Phones to access this YouTube metadata in the same way that Android phones and iPhones do.
- Third, Google is seeking to block access to content owned by book publishers.
- Fourth, Google is even restricting its customers’—namely, advertisers’—access to their own data . . . Google contractually prohibits advertisers from using their data in an interoperable way with other search advertising platforms, such as Microsoft’s adCenter.
- Fifth . . . Google contractually blocks leading Web sites in Europe from distributing competing search boxes.
- Finally, we share the concerns expressed by many others that Google discriminates against would-be competitors by making it more costly for them to attain prominent placement for their advertisements. Microsoft has provided the Commission with a considerable body of expert analysis concerning how search engine algorithms work and the competitive significance of promoting or demoting various advertisements.
Case Is a “Rorschach Test”
Smith wisely acknowledges the “irony” of Microsoft’s filing, given its own history with Europe and antitrust:
There of course will be some who will point out the irony in today’s filing. Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly. This is the first time Microsoft Corporation has ever taken this step. More so than most, we recognize the importance of ensuring that competition laws remain balanced and that technology innovation moves forward.
This filing and Microsoft’s claims emerge as something of a “Rorschach Test” for observers and commentators. Depending on your feelings about Google and Microsoft you may see the claims as sour grapes or the refuge of a company that has fallen behind in the market. Alternatively you may see Microsoft expressing legitimate issues around Google’s market-share dominance. Is Google simply competing fairly or using its power to create anti-competitive barriers to others?
Many of the comments on the Microsoft blog, responding to Smith’s post are critical or dismissive. However there are also those that support Microsoft’s action and fear a world with only one search engine.
I have no view on the legitimacy of the assertions on the list above. I tend to give Google the benefit of the doubt much of the time. I have been genuinely disturbed, however, by the facts alleged by mobile location provider Skyhook Wireless in its legal action against Google/Android. That case, which is unrelated to the European antitrust investigation, contends that Google used its control over Android to interfere with relationships Skyhook had established with two major mobile handset OEMs to preserve access to location data.
Complaints Offer Implied Remedies
Back to the Microsoft claims. The list above is interesting because it presents potential “remedies” by implication. One of the challenges with the antitrust claims around Google search is envisioning what the remedies might be.
The Europeans are very unlikely to try and regulate Google’s algorithm or when Google can show its own Maps vs. competitors’ products (“search neutrality“). That’s not only an unworkable thing in practice, it also opens a giant Pandora’s Box of problems that Europe would be wise to avoid. But the items above suggest several ways that Europe might exact some concessions from Google without directly getting involved with the SERP itself.
I believe that Google will not emerge from the European investigation totally unscathed. It will need to negotiate a settlement (as it did with the FTC over Buzz) — and perhaps this is the true irony of the complaint — Microsoft may have handed both Google and the European Commission some new tools to do just that.
Postscript: I spoke with Google after posting. Google said that Bing is not blocked from crawling YouTube and offered alternative explanations for some of the issues above. The company also said that it has stopped creating specialized mobile versions of YouTube in favor of an HTML5 strategy.
Google also denied blocking advertiser access to their AdWords data and pointed out that Bing has tools that offer easy porting of data/campaigns to Microsoft adCenter.
Google explained that this is actually the second formal Microsoft antitrust complaint. One of the original European complainants, shopping engine Ciao, is owned by Microsoft.
Finally Google argued that Microsoft didn’t take on the issue of the SERP itself (“search neutrality”) because that is both unworkable and Bing does many of the same things (“answers”) that caused complaints by third parties against Google.
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