Brad Smith, speaking as the legal eagle for Microsoft (Nasdaq: MSFT), announced that the Redmond computer giant agrees that Google (Nasdaq: GOOG) has violated European competition laws.
In a blog entry, Smith, Microsoft's senior vice president and general counsel, begins with a compliment for Google's "genuine innovations." But then he delivers a slap at the company's "broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative." Thus, Microsoft joins others by filing a formal complaint with the European Commission regarding the European search market, of which Google has approximately 95%. In the United States, Microsoft's own Bing search tool, along with the company's partnership with Yahoo!, handles around 25% of the traffic.
Microsoft supports its case by referring to the big guns to point out that Google has previously run afoul of the fair playing field. The U.S. Department of Justice has concurred on two occasions. Microsoft asserts that Google's behavior in Europe trumps even that of its practices in the United States.
Smith explains that the search giant "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." Ah, advertisers. Yes that's the crux of the matter -- a revenue stream that's being dammed up by eager beaver Google.
In his blog, Smith details at least six instances where the search company has barred the door, beginning with blocking access by other search engines to YouTube. Microsoft bolsters its position by citing a New York Federal Court decision against Google that read: "Google's ability to deny competitors the ability to search orphan books would further entrench Google's market power in the online search market."
Anticompetitive practices are also frowned upon by the authorities on the other side of the ocean. The European Commission can impose fines of up to 10% of a company's earnings. Several companies have felt the sting, including Microsoft itself, along with Intel (Nasdaq: INTC), which was hit with a sizable fee of 1.06 billion euros (more than $1.41 billion) in 2009. In that ruling, the commission emphasized how it views misconduct within its jurisdiction: "Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years. Such a serious and sustained violation of the EU's antitrust rules cannot be tolerated."
After painting Google black, Microsoft's Smith conceded that there is irony in the filing, since we all know that Microsoft itself has had its share of difficulties within the European Union.
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