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Why the Google antitrust complaint is not about Microsoft

It's about 'bundling' services with a search monopoly

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Foundem is not an American software giant based in Redmond

The Raffs filed with the FCC on February 23, hastily pushing their Universal Search argument into the public domain after someone - apparently, Google - outed the existence of their EU complaint to the press. Not that this did the Raffs much good. When Google publicly revealed the complaint with a blog post early the next day, Google seemed to convince the world that the antitrust action didn't deserve much attention because Foundem belongs to ICOMP, an online-competition organization partly funded by Microsoft.

Microsoft isn't shy about its belief that Google deserves antitrust scrutiny. Steve Ballmer said as much during an appearance this month a search trade show in Silicon Valley, and as Google also revealed with its blog post, a complaint from the Microsoft-owned vertical search engine Ciao has found its way to the European Commission (it was originally filed with antitrust regulators in Germany). But Foundem's argument is their own - and they approached ICOMP on their own. Shivaun and Adam Raff first contacted ICOMP in April 2009 after Adam's brother-in-law heard tell of the organization.

The Raffs wrote every word of their FCC filing, and they penned the meat of the EU complaint, with certain "legal bits" authored by ICOMP legal director David Wood. "Substantial sections are basically us explaining our story and going through the Universal Search data," Shivaun Raff tells The Register. "That comprises a majority of the filing, and that we wrote."

And just for the record: Foundem has never received money from Microsoft or ICOMP. It is not a Microsoft shareholder, and Microsoft holds no stake in Foundem.

Even as it painted Foundem as a Microsoft pawn, Google's blog post discussed the company's EU complaint as if it were a case of sour grapes, indicating it was nothing more than an attempt to show that Google's algorithms discriminate against Foundem's site because it's a vertical search competitor. But this too is patently misleading.

The truth is that the Raffs have never argued against Google's algorithmic decisions. Their concern is that Universal Search favors Google's service over everyone else's and that thanks to Google's whitelists, certain sites aren't subject to the same algorithmic treatment as others. That Google blog post steered clear of these issues, and it seemed that as a result the world almost completely ignored them. Google's talent for search and advertising is matched only by its talent for PR.

Yes, in 2006, an algorithmic change effectively removed Foundem from Google's search engine and all but prevented the company from purchasing placement via Google AdWords. This three-and-a-half year saga plays into the EU complaint and deserves its own attention. It shows not only that Google uses whitelists to exempt certain sites from automated algorithms, but that the web giant isn't nearly as open as it should be about search penalties. But this is quite different from an argument against the design of the algorithms, and in any event, the scope of Foundem's EU complaint extends well beyond its own story.

Shivaun Raff sums up the complaint like this: "You have an overwhelmingly dominant search engine. If you add to that that search engine's ability to apply discriminatory penalties - they're discriminatory because some services are manually rendered immune through white lists - and you add the ability of that search engine to preferentially insert its own services at or near the top of the search results, all of that adds up to an unparalleled and unassailable competitive advantage."

The complaint, she says, is in two halves - the first half detailing search penalties and whitelists, and the second half dealing with the problem of Universal Search. The Universal Search discussion is similar to the FCC filing, and the first half of the complaint covers much of the same ground as our original story on the company and Foundem's December op-ed piece in The New York Times. "What we have written [in the complaint] is our experience, but also a lot of additional supporting information supporting the existence of Google penalties and whitelists," Shivaun Raff explains.

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