Why the Google antitrust complaint is not about Microsoft
It's about 'bundling' services with a search monopoly
Google should spend an afternoon with Shivaun and Adam Raff, the two very real people behind a recent EU antitrust complaint against its web search monopoly. To meet the pair - co-founders of the British price comparison site Foundem - is to know you would never describe them as Microsoft mouthpieces. They're computer scientists by training and search engineers by trade, and with their European complaint - echoed stateside with an FCC filing - they've made a case that deserves a level of attention denied by Google's remarkably successful efforts to paint them as Redmondian sockpuppets.
In their complaint, the Raffs make a pair of arguments. One concerns penalties and whitelists on the world's largest search engine, issues we examined at length in a feature story late last year. But the other details an issue the media has largely ignored. The Raffs also argue that with its so-called Universal Search setup, Google is using its search engine monopoly - which controls an estimated 85 per cent of the global market - to unfairly favor its own services over those of its competitors.
Universal Search is, by definition, a means by which Google inserts links from other Google services into prominent positions on its search results pages.
The EU complaint is under seal, but the meat of this argument can be found in the Raffs' filing (pdf) with the US Federal Communications Commission. "Universal Search transforms Google’s ostensibly neutral search engine into an immensely powerful marketing channel for Google’s other services," the filing reads.
"[It] allows Google to leverage its search engine monopoly into virtually any field it chooses. Wherever it does so, competitors will be harmed, new entrants will be discouraged, and innovation will inevitably be suppressed."
With help from data compiled by market-research outfits HitWise and comScore, the filing makes the case that in the three years since the debut of Universal Search Google has used it to harm competitors in two separate markets: online mapping and price comparisons. In providing Google Maps and Google Product Search (formerly Froogle) with prime placement on its own search engine, the Raffs argue, Mountain View has exerted discriminatory market power to squeeze out the likes of MapQuest and Pricegrabber.
Unique monthly US visitors to Google Maps and MapQuest between January 2007 and November 2009 (Source: ComScore)
Google Maps' rise at the expense of former market leader MapQuest is well-documented, and the filing argues it would be unwise to say this can be attributed to the superior design of Google's mapping service. The Raffs cite data from HitWise showing that around the time Google Maps traffic first exceeded MapQuest's, more netizens were actively searching for MapQuest - ie specifically keying its name into search boxes. In a blog post from February 2009, HitWise said that 62 per cent of MapQuest's traffic came from searches for its particular brand name, compared to only 4.2 per cent with Google Maps.
Next page: Universal Google Product Search
Re: Get a clue...
"Did you realize that OEM's do not HAVE to use Microsoft's OS?"
Sure they don't: shipping something else, are we? How about paying full OEM price rather than that special price we were giving you before? You know, the one everyone else pays when they're only shipping Windows.
Get a clue yourself, preferably one involving Microsoft's lobbying for computers to only ever be shipped with *their* operating system because of "teh piratz". One which also imparts knowledge about how corporations aren't the squeaky-clean entities of fairness you seem to think they are might also come in handy, as well.
Interesting the first post to an article carefully explaining how Foundem are not a Microsoft shill is "Google should not be forced to open up unless Microsoft are also." Says some interesting things about how much people actually read the articles around here.
Also, I decry the Google fanboyism! Google make some swank apps, it's true. This doesn't mean Google should be granted the ability to run roughshod over the little guy. Once Google has crushed all competition in a given market, (let's say the mapquest/google maps/etc. market,) where is Google's incentive to innovate at all? Won't it simply stagnate the way IE6 did once Microsoft had murdered Netscape in the face with a soup spoon?
Regardless of the cool stuff that some of our favourite large multinational companies make, do we really want to encourage the collapse of tech companies into nothing more than “a handful of tech titans and their sycophantic orbiting mini-corps?” Do all of the commenttards here prefer that the tech world become one of Microsoft vs. Apple vs. Google vs. Sunacle, and oh yeah there might be some hardware guys somewhere, but we don’t care about them any more? As soon as they crush all the little guys, it takes one meeting to form an informal cartel, and we the consumer are boned for the next 50 years.
Right now at least these tech titans have to worry about each other. They also have to keep an eye on some of the smaller established companies like Amazon, Adobe, SAP, PeopleSoft, etc. Companies that own tech markets they don’t yet dominate. Once they get big enough to spread horizontally into every tech market possible...exactly where do the VMWares of the world come from?
VMWare came out of left field and shook the entire x86 market up. It caused some of the biggest players at the time to put the brakes on and completely rethink their strategies. You could even argue it helped spark this whole “cloud computing” thing, though I leave it open to debate if that was a good thing or not.
The point is; if we cheer on the Googles, the Microsofts, Apples or Sunacles of the world...we may rapidly find ourselves in a situation where the only choices are between a limited number of competing “complete technology stacks;” none of which have any innovation and all of which are overpriced.
I know there are some hard core capitalists out there who believe that the “rights” of a company (and it’s shareholders) to make profit should trump everyone and everything else’s rights. Those people can never be dissuaded from this belief. To the rest of you though; do we ever want to allow our tech companies to become “to big to fail?” Do we ever want them to get to the point that “there are a limited number of corporations all with non-interoperable software and hardware; you pick one company to be loyal to, and you are then loyal for life?”
I don’t say any of the above as flamebait, nor am I accusing anyone of anything; I am asking my fellow commenttards to think about the questions raised. As always, thoughtful discussion of this is a goot thing.
A pint for anyone I've offended with my ranty questions; offence was not intended.
There is something illegal
It is called abusing a monopoly position. Competition laws the world over deal with this. Google have managed (for various reasons, including a very clever set of algorithms, and a lot of luck) have managed to dominate the world of search. If they use that dominant position to prevent competition in other areas where they are essentially a start-up; then that is illegal.
Microsoft ran foul of this by including browsers and media players in a dominant position OS. You can choose to use another OS, but Microsoft have close to a monopoly position, so have to follow different rules. Note that Apple are allowed to bundle a browser, as are Red Hat. It is just Microsoft that can't.
Google have been very effective at using their dominant position in search to squeeze out other apps. This is almost certainly anti-competitive, and if there is justice in this world, they will get found against in this or some similar actions. Whether that happens since Google are still considered "darlings of the tech world" whereas people consider Microsoft to be the evil empire. Personally, I think of it the other way around. Microsoft haven't taken a land grab of vast amounts of my personal data; and haven't stolen the entire world's books; and a bunch of other stuff.