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Thursday, March 31, 2011
Microsoft Filed Complaint Against Google's Market Share With EU

Microsoft filed a formal complaint with European antitrust regulators about Google's dominance of the Internet search market in the region.

The filing is part of the European Commission's ongoing investigation into whether Google has violated European competition law.

Although Microsoft says that it respects Google's engineering prowess and competitive drive, the company is concerned "by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative." Therefore Microsoft decided to join a large number of companies registering their concerns about the European search market. By the European Commission's own reckoning, Google has about 95 percent of the search market in Europe. This contrasts with the United States, where Microsoft serves about a quarter of Americans' search needs either directly through Bing or through its partnership with Yahoo!.

Twice the Department of Justice has intervened to thwart Google's unlawful conduct from impeding fair competition. In 2008 the DOJ moved to file suit against Google for its unlawful attempt to tie up and set search advertising prices at Yahoo!, causing Google to back down. And last year the DOJ formally objected to Google's efforts to monopolize book content, a position affirmed by a federal district court in New York just last week.

"Google has built its business on indexing and displaying snippets of other organizations' Web content. It understands as well as anyone that search engines depend upon the openness of the Web in order to function properly, and it's quick to complain when others undermine this. Unfortunately, Google has engaged in a broadening pattern of walling off access to content and data that competitors need to provide search results to consumers and to attract advertisers," Brad Smith Senior Vice President & General Counsel, Microsoft wrote on the company's blog.

Microsoft's filing details many instances where Google is impeding competition in these areas.

For example, since Youtube's acquisition in 2066, Microsoft claims that Google 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," Smith said.

Microsoft also accused Google for blocking Microsoft's new Windows Phones from operating properly with YouTube. Google has enabled its 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.

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. As a result, Microsoft's YouTube "app" on Windows Phones is basically just a browser displaying YouTube?s mobile Web site, without the functionality offered on competing phones.

Microsoft added that Google was seeking to block access to content owned by book publishers. This was underscored in federal court in New York last week, in the decision involving Google's effort to obtain exclusive access to the large volume of so -called "orphan books" - books for which no copyright holder can readily be found. Under Google's plan only its search engine would be able to return search results from these books. As the federal court said in rejecting this plan, "Google's ability to deny competitors the ability to search orphan books would further entrench Google's market power in the online search market."

"This is an important initial step under U.S. law, but it needs to be reinforced by similar positions in Europe and the rest of the world," Smith said commenting on the federal court' s ruling.

Microsoft attacked Google on the way it treats advertisers, claiming that the company is restricting 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. Microsoft claims that this data belongs to the advertisers, but Google prohibits advertisers from using their data in an interoperable way with other search advertising platforms, such as Microsoft's adCenter.

"This makes it much more costly for Google's advertisers to run portions of their campaigns with any competitor, and thus less likely that they will do so. That is a significant problem because most advertisers figure that they have to advertise first with Google. Competing search engines are left with less relevant ads, and less revenue," Smith said.

Google is also typically attracts users through distribution of search boxes through Web sites. Microsoft accuses Google for blocking 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."

Finally, Microsoft is concerned that Google discriminates against would-be competitors by making it more costly for them to attain prominent placement for their advertisements. Microsoft said that it had provided the Commission with a expert analysis concerning how search engine algorithms worked and the competitive significance of promoting or demoting various advertisements.

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