Microsoft Files E.U. Complaint Against Google

Microsoft Corp. on Thursday threw its weight behind an existing probe by European Union authorities into whether rival Google Inc. is unfairly thwarting competition in the online search market.

Microsoft's General Counsel Brad Smith said the company is filing its own complaint against Google with the European Commission, citing concern over "a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative."

A spokeswoman for the EU's Competition Commissioner Joaquin Almunia said the Commission had taken note of Microsoft's complaint and will give Google the opportunity to tell its side of the story.

The Commission opened a formal investigation into Google's behavior last November, following complaints from several smaller Web companies that the search giant was burying them in its results and engaging in other anticompetitive practices.

Google has long pointed to Microsoft's involvement in the probe, since one of the original complainants, online-shopping site Ciao, is owned by Microsoft's search engine Bing. Another company involved in the case, U.K.-based price-comparison site Foundem, is a member of a Microsoft-sponsored technology trade organization.

Al Verney, a Brussels-based spokesman for Google, said the company wasn't surprised by Microsoft's move since one of their subsidiaries was one of the original complainants.

"For our part, we continue to discuss the case with the European Commission and we're happy to explain to anyone how our business works," Verney said.

Nevertheless, Microsoft's direct complaint adds weight to the case, since it lists several specific examples of alleged anticompetitive practices by Google involving some of the search engine's pet projects.

Smith claims that Google "put in place a growing number of technical measures to restrict competing search engines from properly accessing" its YouTube video-streaming site.

"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," he wrote in a blog post.

Smith also said that Google blocked Microsoft's Windows Phones "from operating properly with YouTube," but offers better services to its own Android phones and iPhones, whose producer Apple Inc. does not own a search engine.

With Bing, Microsoft is one of Google's biggest direct rivals. It also has a partnership deal with the other big search engine, Yahoo! Inc.

Yet neither Bing nor Yahoo have found a way of closing in on Google, which processes two out of three online searches in the U.S. In Europe, the Mountain View, Calif., -based company controls more than 90 percent of the search market. The two companies also compete in other areas, such as cloud computing — where they offer remote server space and software processing to clients.

Central to Thursday's complaint is how Google's practices affect advertising — the main source of revenue for Web companies offering free services.

"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," Smith said.

Microsoft claims Google is keeping some advertisers from accessing their own data and transferring it to rival advertising platforms, such as its own adCenter. That allegation echoes complaints by other companies and is part of the Commission's probe.

Smith said Microsoft, based in Redmond, Wash., had provided the European Commission with a "considerable body of expert analysis" to support its case.

With its complaint, Microsoft finds itself in a new situation in Europe, after it battled antitrust investigations and billion euro (dollar) fines from the European Commission for years.

"Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly," Smith said.

That Microsoft is getting involved in the EU's Google probe is quite "natural," said Federico Etro, an economics professor at the University of Venice who has studied the case.

However, "to frame this just as a Microsoft-Google scenario is a bit missing the bigger picture," he added.

Online search is a very complex market with one clearly dominant firm, creating multiple consumer and economic issues, said Etro.

The Commission's investigation is a necessary step to gain more transparency, not only about competitors' and advertisers' access to services and data, but also on how Google prices placement for its search and display ads, Etro said.

If Google is found guilty of anticompetitive behavior it could be fined up to 10 percent of annual revenue, which reached some $29 billion last year.

This program aired on March 31, 2011. The audio for this program is not available.


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