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March 31, 2011

Microsoft's Antitrust Complaint

Microsoft will file a formal antitrust complaint against Google "as part of the European Commission's ongoing investigation into whether Google has violated European competition law". Brad Smith, Senior Vice President at Microsoft, says that Google's questionable business practices prevented competitors from gaining market share. As Brad Smith puts it, "Google has done much to advance its laudable mission to organize the world's information, but we're concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative".

I was surprised to read some of the complaints.

"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. Without proper access to YouTube, Bing and other search engines cannot stand with Google on an equal footing in returning search results with links to YouTube videos and that, of course, drives more users away from competitors and to Google."

YouTube is just a video sharing site. Google could prevent all the other search engines from indexing it and this shouldn't be a legal problem. But Google doesn't prevent other search engines from indexing YouTube: there are 284 million pages from in Bing's index. Google returns more results from (about 443 million pages), but Google owns YouTube and it can easily index all the pages. If Google prevents other search engines from indexing some videos, it's Google's problem: YouTube loses a lot of views and money from advertising.

"In 2010 and again more recently, Google blocked Microsoft's new Windows Phones from operating properly with YouTube. Google has enabled its own Android phones to access YouTube so that users can search for video categories, find favorites, see ratings, and so forth in the rich user interfaces offered by those phones. It's done the same thing for the iPhones offered by Apple, which doesn't offer a competing search service."

YouTube has some APIs for building apps, so you don't have to be a big company to develop YouTube apps. As a result, you'll find a lot of third-party YouTube apps in Apple's App Store, for example. Unfortunately, third-party apps can't use YouTube's official logo, YouTube's trademarks and there are other usage restrictions. That's probably the reason why companies like Apple, Microsoft, HTC need to partner with Google to create YouTube apps. If Microsoft couldn't reach an agreement with Google, then it's a business issue. Google has no obligation to allow other companies to create software that uses its APIs.

"Google is even restricting its customers'—namely, advertisers'—access to their own data. Advertisers input large amounts of data into Google's ad servers in the course of managing their advertising campaigns. This data belongs to the advertisers: it reflects their decisions about their own business. But Google contractually prohibits advertisers from using their data in an interoperable way with other search advertising platforms, such as Microsoft's adCenter."

AdWords offers some exporting features and even Microsoft admits that you can export AdWords data.

"One of the ways that search engines attract users is through distribution of search boxes through Web sites. Unfortunately, Google contractually blocks leading Web sites in Europe from distributing competing search boxes. It is obviously difficult for competing search engines to gain users when nearly every search box is powered by Google. Google's exclusivity terms have even blocked Microsoft from distributing its Windows Live services, such as email and online document storage, through European telecommunications companies because these services are monetized through Bing search boxes."

This seems to be a valid concern that needs to be addressed by Google. AdSense has some similar terms that prohibit using competing ad/search services on the same page, but not on the same site. The good news is that Google doesn't force the "leading Web sites in Europe" to use Google's search box and they can easily switch to Bing.

All in all, Microsoft doesn't have a strong case, but that doesn't mean that Google hasn't abused its power and that the investigation won't slow down Google. When you have 95% market share in Europe, you're almost a monopoly and an easy target for antitrust investigations.


  1. Hypocritical and weak; these are moves made by a company that finds it difficult to come to terms with reality.

  2. I think the real reason Google is dominating the web is mostly because they were there first and usually had great services to offer consumers for free or low cost. In the meantime, MS was doing what? I love MS as much as Google, but the reason MS is sucking at the web now is because they dropped the ball for years.

  3. Let me see if I have this right... 90% of the world uses Windows which comes preloaded, software integrated and uninstallable Internet Explorer with the default search engine being Bing. WP7 software AND hardware integrates (with the search button required) Bing as the uninstallable search engine and also requires a Windows Live account to consume any media. Windows is also required to make applications for WP7.

    Consider Microsoft extremely lucky that Google doesn't act more like Microsoft. Microsoft was hit with many anti-competitive lawsuits but they are still doing way worse then Google. Microsoft quit jamming your ridiculous Bing and Internet Explorer down my throat and let me forward my Hotmail emails to my Gmail account so I never have to use Hotmail.

    These complaints are ridiculous, Google saw the anti-competitive beast long before it came knocking and I have noticed they they do many things to guard against this. Things like chrome asking which browser you would like to use and easily transferring contacts and closing accounts come to mind.

    Microsoft stop litigating and start innovating. As soon as Adobe CS can somehow break the bounds of Windows I'm never using your products again.

  4. If Google owns YouTube, then Google has the complete right to block YouTube from being in other search engines, and whatnot. Google is a very strong business and should be allowed to do what they want with their business. If they want to block their services with other devices that are not theirs, then they can do that. Companies can do what they would like to do, in order to increase their sales. That is like making an app only available on the iPad. If someone wants to try out that app bad enough, then they will get an iPad. YouTube, is like a major app. If you want access to it bad enough, then switch to what has access to that app. It makes perfect sense. Google is doing nothing wrong.

  5. I suspect Google will win.

    Most of these are minor issues that will be easily resolve. The last one is a valid complaint, just about, it a area Google can either choose to fight or to come to a solution with the EC, I suspect they will try the second first.

  6. Google should respond by blocking Bing from indexing their web properties. It makes complete sense.

  7. Google, please don't be so evil or else...

  8. Microsoft is starting to worry because it realises the future of its company lies in the web. Unfortunately as it doesn't have any decent products (have you compared hotmail to gmail?) it has to pick up on issues like the ones listed to explain why users aren't blocking to Bing. I would suggest that the main reason people don't use MS products is because they aren't any good.

    And for Microsoft to complain about antitrust issues...

  9. There's no reason Microsoft should be complaining. The fact that people are moving to google is mainly due to the fact that google has a far better search engine. If microsoft is that worried they should prevent google from index all their sites. Which won't end up well for them and they know it.

  10. I heard this issue a year ago and which I've known is commission starting investigating if Google lowered the position among unpaid results. and also commission investigate about the issue that Google lowered the the quality of scored sponsor.

  11. Looks like someone play ugly.

    Microsoft Live@edu is designed for you, but maybe not for your browser
    This Web site can only be displayed using Windows® Internet Explorer® 7 or later, Mozilla Firefox 3.0 or later, or Safari 3.0 or later.

    Get the latest version of :
    Windows Internet Explorer
    Mozilla Firefox

    This is not a recent problem ... i saw it first time 25 june 2010.

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