Google Won and Microsoft Is Not Happy. Oh Well.
Google got a big win yesterday when the FTC gave them what amounted to the equivalent of saying that they MIGHT slap them on the wrist regarding Google’s business practices. Google and antitrust, as far as the federal government is concerned for now, is a non-issue.
As Cynthia Boris reported yesterday, both sides can, and did, come away from this claiming a victory. That’s to be expected. Google really did win and the government has to say it won.
On the other hand, this is likely to not be the end of attacks on Google’s business practices. Here is a post on the ‘Microsoft on the Issues‘ blog by Dave Heiner, Vice President and Deputy General Counsel for Microsoft, who is one of the major players in the Fair Search initiative.
The FTC took steps today to address some of Google’s improper business practices. We find it troubling that the agency did not adhere to its own standard procedures that call for the agency to obtain industry input on proposed relief and secure it through an enforceable consent decree. The FTC’s overall resolution of this matter is weak and—frankly—unusual. We are concerned that the FTC may not have obtained adequate relief even on the few subjects that Google has agreed to address.
At that point he was just warming up. As to whether the FTC follows its own guidance….
But we are puzzled and concerned that the FTC did not follow its standard practice in exercising due diligence by obtaining feedback from the industry on the specific terms of Google’s promise before accepting it as a suitable resolution of this matter.
Had the agency asked, we would have explained that Google’s promise on ad campaign portability falls short of the mark in various ways.
OK, maybe Dave needs a Dale Carnegie course because I doubt that saying a federal agency didn’t follow its own protocol in an investigation is the kind of thing that doesn’t win friends and influence people in DC. But hey, why stop there?
And what of the search bias issues? Google has long said that it merely aims to offer customers the most relevant answer to their query, and the FTC Commissioners accepted that view. Yet we know that Google routinely and systematically heavily promotes its own services in search results. Is Google+ really more relevant than Facebook? Are Google’s travel results better than those offered by Expedia, Kayak and others? We also know that Google ranks shopping results (the most important category commercially) in part on the basis of how much advertisers pay to Google for placement, after very publicly promising that it would never do so. This does not sound like product improvement.
We have heard all of that before so I suspect Mr. Deputy Counsel felt compelled to repeat his allegations because that’s what lawyers do.
And in one last parting shot, Heiner holds hope that the European Commission will lead the world in right thinking about Google and its business practices.
The good news is that other antitrust agencies, within the United States and overseas, are still examining Google’s conduct. In Europe Vice President Almunia has made clear that he will close his investigation of Google only with a formal, binding order that addresses search bias and other issues. We remain hopeful that these agencies will stick to their established procedures, ensure transparency, and obtain the additional relief needed to address the serious competition law concerns that remain.
Google won. Microsoft lost. The world moves forward. There are lots of theories, including substantial
influence peddling lobbying, as to how Google pulled this off. I suspect they simply did what everyone else does which is play the Washington, DC game and they happened to do it better than the other guys. Another competitive beat down of sorts.
In the end, are you impacted by this at all? I bet your more concerned about the taxes coming out of your next check than whether Microsoft got its feelings hurt. As Internet marketers Google will still get most of our attention as it should. I can say confidently that if Bing powered search could account for 40% or more of the search market share then Internet marketers would give them all the attention they want. The trouble is that the people that all marketers must reach, their consumer, isn’t buying what Microsoft is selling in search so why should anyone else?