All of you folks who have been around a while will enjoy the delicious irony in this. The baddest-arse monopolist on the planet is now expressing “concerns” about Google’s growing market power.
Specifically, a Microsoft attorney has penned an official company blog post explaining why Google’s growing share of the search and advertising market is an anti-competitive threat, calling on regulators to “decide whether or not Google’s practices should be seen as illegal.”
This is obviously the latest in Microsoft’s many futile attempts to slow the Google juggernaut. But it’s also a sentiment that many companies affected by Google can relate to.
The lengthy post by VP and Deputy General Counsel Dave Heiner is worth a read. Here’s the most relevant part:
As Google’s power has grown in recent years, we’ve increasingly heard complaints from a range of firms—large and small—about a wide variety of Google business practices. Some of the complaints just reflect aggressive business stances taken by Google. Some reflect the secrecy with which Google operates in many areas. Some appear to raise serious antitrust issues. As you might expect, many concerned companies have come to us and asked us for our reaction and even for advice. When their antitrust concerns appear to be substantial, we suggest that firms talk to the competition law agencies. (Complaining to Microsoft won’t do much good.)
As reflected in the news earlier this week, firms voicing these complaints have started to meet with competition law agencies, confidentially. (Firms – especially smaller companies – are often reluctant to voice their antitrust concerns publicly because they feel that they must continue to do business with Google and do not want to jeopardize their relationship with them.) Over the past few months Microsoft, too, has met with the DOJ and the European Commission. The subject of our meetings has been the competition law review, now completed, of the search partnership between Yahoo! and Microsoft. As you might expect, the competition officials asked us a lot of questions about competition with Google—since that is the focus of the partnership. We told them what we know about how Google is doing business. A lot of that entails explaining the search advertising business, which is complex. Some of that inevitably gets into Google practices that may be harming publishers, advertisers and competition in search and online advertising.
All of this is quite important because search is so central to how people navigate the Internet, and because advertising is the main monetization mechanism for a wide range of Web sites and Web services. Both search and online advertising are increasingly controlled by a single firm, Google. That can be a problem because Google’s business is helped along by significant network effects (just like the PC operating system business). Search engine algorithms “learn” by observing how users interact with search results. Google’s algorithms learn less common search terms better than others because many more people are conducting searches on these terms on Google.
These and other network effects make it hard for competing search engines to catch up. Microsoft’s well-received Bing search engine is addressing this challenge by offering innovations in areas that are less dependent on volume. But Bing needs to gain volume too, in order to increase the relevance of search results for less common search terms. That is why Microsoft and Yahoo! are combining their search volumes. And that is why we are concerned about Google business practices that tend to lock in publishers and advertisers and make it harder for Microsoft to gain search volume.
Microsoft would obviously be among the first to say that leading firms should not be punished for their success. Nor should firms be punished just because a particular business practice may harm a rival—competition on the merits can do that, too. That is a position that Microsoft has long espoused, and we’re sticking to it. Our concerns relate only to Google practices that tend to lock in business partners and content (like Google Books) and exclude competitors, thereby undermining competition more broadly. Ultimately the competition law agencies will have to decide whether or not Google’s practices should be seen as illegal.
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