Still Seeking Resolution to Search Competition Issues

Two years ago, Microsoft applauded the U.S. Federal Trade Commission and the European Commission when they opened their antitrust investigations into Google’s business practices. We believed then, as we do now, that the future of competition in search is at stake in these investigations. This is important not just for Microsoft, but for the thousands of smaller companies whose businesses depend on a competitive search marketplace. That is why so many companies have made their concerns about Google’s misconduct known to regulators on both sides of the Atlantic.

The European Commission has stated publicly that Google must address four areas of concern regarding its business practices, or else it will face enforcement action. We understand that the European Commission and Google are working toward a binding, enforceable legal order that would address these competition law concerns. Meanwhile, in the United States, news reports have stated that the FTC may close its investigation if Google merely makes certain “voluntary commitments” to reform its behavior. Separately, news reports suggest that Google will finally agree to live up to its promises to make its standard essential patents available to all on reasonable terms. Unfortunately, this agreement appears to be less demanding than the pledge the U.S. Department of Justice received from Apple and Microsoft nearly a year ago.

You might think that Google would be on its best behavior given it’s under the bright lights of regulatory scrutiny on two continents, particularly as it seeks to assure antitrust enforcers in the U.S. and Europe that it can be trusted on the basis of non-binding assurances that it will not abuse its market position further.

However, as we enter 2013, that is not the case. Here’s just one example: We continue to be dogged by an issue we had hoped would be resolved by now: Google continues to prevent Microsoft from offering consumers a fully featured YouTube app for the Windows Phone.

We formally raised this concern almost two years ago with the European Commission. (See “Adding our Voice to Concerns about Search in Europe,” Microsoft on the Issues, March 30, 2011.) Subsequently, we’ve discussed this matter with the U.S. Federal Trade Commission, which also is investigating Google’s misconduct.

As we wrote at the time, these restrictions are just one example of where we believe Google is impeding competition in the marketplace:

“[I]n 2010 and again more recently, Google blocked Microsoft’s new Windows Phones from operating properly with YouTube. Google has enabled its own Android phones to access YouTube so that users can search for video categories, find favorites, see ratings, and so forth in the rich user interfaces offered by those phones. It’s done the same thing for the iPhones offered by Apple, which doesn’t offer a competing search service. 

Unfortunately, Google has refused to allow Microsoft’s new Windows Phones to access this YouTube metadata in the same way that Android phones and iPhones do. As a result, Microsoft’s YouTube “app” on Windows Phones is basically just a browser displaying YouTube’s mobile Web site, without the rich functionality offered on competing phones. Microsoft is ready to release a high quality YouTube app for Windows Phone. We just need permission to access YouTube in the way that other phones already do, permission Google has refused to provide.” 

Despite government scrutiny, Google continues to block Microsoft from offering its customers proper access to YouTube. This is an important issue because consumers value YouTube access on their phone: YouTube apps on the Android and Apple platforms were two of the most downloaded mobile applications in 2012, according to recent news reports. Yet Google still refuses to allow Windows Phone users to have the same access to YouTube that Android and Apple customers enjoy. Microsoft has continued to engage with YouTube personnel over the past two years to remedy this problem for consumers. As you might expect, it appears that YouTube itself would like all customers – on Windows Phone as on any other device – to have a great YouTube experience. But just last month we learned from YouTube that senior executives at Google told them not to enable a first-class YouTube experience on Windows Phones. 

Google often says that the antitrust offenses with which it has been charged cause no harm to consumers. Google is wrong about that. In this instance, for example, Google’s refusal deprives consumers who use competing platforms of a comparable experience in accessing content that is generally available on the Web, almost all of which is created by users rather than by Google itself. And it’s inconsistent, to say the least, with Google’s public insistence that other competing services, such as Facebook, should offer Google complete access to their content so they can index and include it on their search site. 

Google dismisses these concerns as little more than sour grapes by one of its competitors. But the reality is that consumers and competitors alike are getting “scroogled” across the Web on a daily basis from this type of misconduct. 

Hopefully, Google will wake up to a New Year with a resolution to change its ways and start to conform with the antitrust laws. If not, then 2013 hopefully will be the year when antitrust enforcers display the resolve that Google continues to lack.

About the Author

Vice President & Deputy General Counsel, Microsoft

Dave Heiner is Vice President and Deputy General Counsel at Microsoft, where he heads up two organizations within the company’s legal department – the Antitrust Group and the Corporate Standards Group. Mr. Heiner is responsible for antitrust counseling, representation of the company before antitrust regulatory agencies worldwide and work with standard setting organizations. Before joining Microsoft in 1994, Mr. Heiner practiced at Sullivan & Cromwell in New York. Mr. Heiner serves on the Board of Probono.net, a national non-profit that works to increase access to justice for the poor through efficient use of technology. Mr. Heiner has handled a number of immigration cases through Volunteer Advocates for Immigrant Justice, a Seattle-based affiliate of Kids in Need of Defense (KIND).