Nearly a decade after settling an antitrust case regarding the bundling of Internet Explorer with Windows, Microsoft is on the verge of putting the case behind it for good and is pursuing antitrust claims of its own against Google’s dominant search engine.
The United States vs. Microsoft case was settled in 2002 and originally scheduled to expire in 2007. But although the judgment was extended, Microsoft is now just two weeks away from meeting the “final milestones” of the court order.
While Microsoft tries to put its own antitrust problem to rest, the company is piling on to the various complaints about Google, whose search engine is far more widely used than Microsoft’s Bing or Yahoo.
Microsoft general counsel Brad Smith wrote this week that “Microsoft is filing a formal complaint with the European Commission as part of the Commission’s ongoing investigation into whether Google has violated European competition law.”
“As the only viable search competitor to Google in the U.S. and much of Europe, we respect their engineering prowess and competitive drive,” Smith wrote in a blog post. “Google has done much to advance its laudable mission to ‘organize the world’s information,’ but we’re concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative.”
The blog post is titled “Adding our voice to concerns about search in Europe,” positioning Microsoft as just another concerned party, rather than the primary beneficiary of any legal action against Google.
Yet Microsoft’s allegations against Google are reminiscent of the complaints U.S. regulators made about Microsoft a decade ago. A summary of the case on the Department of Justice website says “Microsoft engaged in a campaign to eliminate the potential threat from the Netscape Navigator web browser by placing restrictions on OEMs, integrating Internet Explorer into Windows in a manner that did not permit users or the OEMs to remove access, and engaging in restrictive and exclusionary practices with respect to Internet Access Providers, ISVs, and Apple.” Microsoft’s anticompetitive activities also affected Sun’s Java technologies.
Internet Explorer, by the way, achieved market share of about 95% around the time of the settlement, higher than Google’s share of the search market. Google has somewhere between 66% and 90%, depending on who is counting. It’s also pretty easy to switch from one search engine to another, a fact Google has consistently trumpeted.
Microsoft acknowledges the irony in its complaint against Google. And while Microsoft routinely files patent lawsuits, the company says this is the first time it has issued an antitrust complaint. “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. This is the first time Microsoft Corporation has ever taken this step,” Smith writes. “More so than most, we recognize the importance of ensuring that competition laws remain balanced and that technology innovation moves forward.”
Smith laid out several complaints regarding how Google stifles competition. Google has restricted competing search engines and Windows phones from “properly accessing” YouTube, Microsoft says. Google also makes it more costly for “advertisers to run portions of their campaigns with any competitor” by restricting access to its system for storing advertising campaign data, and places search boxes on third-party websites while “contractually [blocking] leading Web sites in Europe from distributing competing search boxes,” Microsoft said.
To settle its own antitrust suit back in 2002, Microsoft had to agree to new Windows licensing requirements and “a prohibition on retaliation against OEMs for promoting competing middleware and operating systems.” Although roughly nine out of 10 desktops and laptops still run Windows, Department of Justice documents say “these provisions are working as planned,” and note that “Dell has begun to ship PCs loaded with the Linux operating system in place of Windows.”
A joint status report on Microsoft’s compliance filed this month says “progress made over the last two and a half months has been more rapid than Plaintiffs anticipated at the last Status Conference, and bodes well for Microsoft’s ability to meet the final milestones, set for April 15, 2011.” If Microsoft meets all requirements the final judgments in the case can expire as scheduled on May 12.
Since its peak of 95% browser share, Internet Explorer has rapidly lost ground to Mozilla’s Firefox and Google’s Chrome. By some counts, Microsoft now has less than half of the browser market, although it is still the leading player.
Will Google similarly lose its dominant search market share and become the new antitrust bad boy? Only time will tell. But like Microsoft, Google faces multiple legal threats. In addition to the European action, Google settled with the U.S. Federal Trade Commission in a privacy case over the Google Buzz social networking service.
This is a privacy issue, rather than an antitrust one. But Google will have to face independent privacy audits for the next 20 years – or about twice as long as Microsoft has needed to get that pesky Internet Explorer lawsuit off its back.