When faced with allegations of antitrust activity, European regulators have a habit of taking sweeping action against technology companies. Witness a string of huge fines levied against companies, including €400 million ($563.9 million USD) against Siemens (S SI), €899 million against Microsoft (s MSFT) and €1.45 billion against Intel (s INTC).
So perhaps it’s no surprise that another major force in technology, Google (s GOOG), is currently subject to a European investigation. What is unusual, however, is that the latest complaint added to the pile comes from an unusual source: Microsoft itself.
The company, which spent years fighting antitrust cases all over the world, has filed documents with Europe’s Competition Commissioner, the regulator that oversees continent-wide antitrust actions, arguing its rival is engaging in a number of anti-competitive practices around search and advertising.
A post by Brad Smith, the company’s top lawyer, explains a number of areas where Microsoft feels Google is unfairly using its dominance in search — a dominance, by the way, that’s greater in Europe than anywhere else, stretching to almost 100 percent of the market in some cases. Areas for concern, it suggests, include access to YouTube metadata, the ongoing arguments over the Google book settlement, exclusive agreements with websites to embed search boxes on their pages, making advertising data proprietary, and discriminating against rivals by forcing them to pay more for advertising.
It’s a carefully worded letter — you wouldn’t expect anything less from a company that employs a vast number of lawyers — but it manages to be relatively succinct in its arguments.
We readily appreciate that Google should continue to have the freedom to innovate. But it shouldn’t be permitted to pursue practices that restrict others from innovating and offering competitive alternatives. That’s what it’s doing now. And that’s what we hope European officials will assess and ultimately decide to stop.
Of course, what adds extra spice is that this is almost a mirror of a similar position taken by Google two years ago, during the last European investigation into Internet Explorer. At that time, Microsoft was under pressure for bundling the web browser into its operating system at the expense of its rivals — the same basic complaint that had been rumbling since the browser wars of the 1990s. Newly propelled by its desire to push its own Chrome browser, Google threw its hat into the ring, saying, “We are confident that more competition in this space will mean greater innovation on the web and a better user experience for people everywhere”.
The result of that case was that Microsoft had to start offering Windows users a “ballot box” to pick their default browser, but its recent turn in the hot seat is not lost on Smith, or the company in general. “Having spent more than a decade wearing the shoe on the other foot with the European Commission,” he says, “the filing of a formal antitrust complaint is not something we take lightly”.
Right now it’s generating a lot of heat — mainly from pundits incensed at Microsoft’s cheeky about-face — but not very much light.
That’s because in reality, it’s very hard to glean what this means for either company. We can answer a few questions, though. Why the decision by Microsoft now? Well, it’s certainly hard to imagine Microsoft joining this movement under the previous Competition Commissioner, Neelie Kroes, who proved such a thorn in the company’s side over her six years in the job — but Kroes is now in charge of a different range of European IT and telecoms issues. Now there’s a new antitrust boss, Joaquin Almunia.
In addition, Microsoft may be preparing similar accusations in other territories, including the U.S. — and Washington has previously shown that it might be prepared to look at Google’s actions. Just Wednesday, the FTC announced it was charging Google with deceptive privacy practices over the rollout of Buzz.
So is this a new, contrite Microsoft — or just a tactical maneuver?