June 19, 2024

Antitrust Cry From Microsoft

Microsoft plans to file a formal antitrust complaint on Thursday in Brussels against Google, its first against another company. Microsoft hopes that the action may prod officials in Europe to take action and that the evidence gathered may also lead officials in the United States to do the same.

In Europe, Microsoft is joining a chorus of complaints, but until now they have come mainly from small Internet companies saying that Google’s search engine unfairly promotes its own products, like Google Product Search, a price comparison site, over rival offerings.

The Internet and smartphones are the markets where energy, investment and soaring stock prices reside. Microsoft, still immensely wealthy, is pouring billions into these fast-growing fields, especially Internet search. Yet the champion of the PC era trails well behind Google.

“The company that was the 800-pound gorilla is now resorting to antitrust, where it is always the case that the also-rans sue the winners,” said Michael A. Cusumano, a professor at the Massachusetts Institute of Technology’s Sloan School of Management who has studied Microsoft.

The Microsoft complaint, Professor Cusumano notes, is also a reminder of the comparative speed with which fortunes can shift in fast-moving technology markets. “It doesn’t happen instantly, but it does happen faster than in most industries,” Professor Cusumano said. “It took Google about a decade to really turn the tables on Microsoft.”

For years, the swaggering giant of personal computer software battled competitors and antitrust regulators in America and abroad, parrying their claims that it had bullied rivals and abused its market muscle. In the United States, it suffered rulings against it and in 2001 reached a settlement that prohibited Microsoft from certain strong-arm tactics. In Europe, Microsoft absorbed setbacks and record fines from regulators and judges.

Still, irony has no place in antitrust doctrine. Microsoft’s complaint must be weighed on the merits, as part of a wide-ranging antitrust investigation of Google, begun last year and led by Europe’s competition commissioner, Joaquín Almunia.

The litany of particulars in Microsoft’s complaint, the company’s lawyers say, includes claims of anticompetitive practices by Google in search, online advertising and smartphone software. But a central theme, Microsoft says, is that Google unfairly hinders the ability of search competitors — and Microsoft’s Bing is almost the only one left — from examining and indexing information that Google controls, like its big video service YouTube.

Such restraints, Microsoft contends, undermine competition — and thus pose a threat to consumer choice and better prices for online advertisers.

When told of the Microsoft claims, Adam Kovacevich, a Google spokesman, denied that the company had done anything wrong and said its practices did not deny Microsoft access to Google technology and content.

Though it is making an antitrust claim, Microsoft is also claiming a bit of hypocrisy on Google’s part. In an interview, Bradford L. Smith, Microsoft’s general counsel, cited Google’s stated mission to “organize the world’s information and make it universally accessible and useful.”

“That is a laudable goal,” Mr. Smith said. “But it appears Google’s practice is to prevent others from doing the same thing. That is unlawful and it raises serious antitrust issues.”

Google’s strategy, he adds, seems to be to “wall off content so that it cannot be crawled and searched by competing companies.”

In smartphones — sources of increasing volumes of search traffic — Microsoft says Google is withholding technical information needed to let phones using Windows Phone 7 software have a rich, full-featured application for YouTube. That technical information, Microsoft says, is available not only in Google’s Android software but also Apple iPhones, as part of a deal dating back to when Google’s chief executive, Eric E. Schmidt, was on the Apple board. (He resigned in 2009, after the Federal Trade Commission raised questions about the arrangement.)

Mr. Kovacevich said that about two years ago, the company decided to make an improved version of YouTube available for all mobile devices instead of tailoring it to each company on smartphone applications, as it did earlier with Apple.

Microsoft also contends that Google has set up what amount to technical roadblocks so that Microsoft’s Bing search service cannot examine and index up to half of the videos on YouTube.

Another Microsoft claim focuses on Google’s ad contracts. Its contracts prohibit advertisers and online agencies from using third-party software that could instantly compare results and move advertisers’ data from one ad platform to another — from Google’s Adwords to Microsoft’s Adcenter, for example.

Article source: http://feeds.nytimes.com/click.phdo?i=c7408713451c5584a31e84492249ed6f

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