Microsoft blasts Google for market 'control'

Nicole McCormick
01 Mar 2010

Microsoft’s vice president and deputy general counsel Dave Heiner has blasted Google’s search business practices which he claims are anti-competitive since they “lock in publishers and advertisers.”

“Both search and online advertising are increasingly controlled by a single firm, Google,” Hainer said on MS’s corporate blog.

“That can be a problem because Google’s business is helped along by significant network effects (just like the PC operating system business).

“Search engine algorithms `learn’ by observing how users interact with search results. Google’s algorithms learn less common search terms better than others because many more people are conducting searches on these terms on Google.

“These and other network effects make it hard for competing search engines to catch up.”

Hainer said MS’s Bing search engine is addressing this challenge by offering innovations in areas that are less dependent on volume.

But he says that “Bing needs to gain volume too, in order to increase the relevance of search results for less common search terms.”

“That is why Microsoft and Yahoo are combining their search volumes,” Hainer said. “And that is why we are concerned about Google business practices that tend to lock in publishers and advertisers and make it harder for Microsoft to gain search volume.”

His comments follow the launch of a the European Commission anti-trust probe into Google’s search market dominance last week.

“The European Commission is likely to treat these cases quite seriously, given that Google’s share of search and search advertising is north of 95% in many European countries,” said Hainer.

“Google’s public response to this growing regulatory concern has been to point elsewhere—at Microsoft. Google is telling reporters that antitrust concerns about search are not real because some of the complaints come from one of its last remaining search competitors.

“It’s worth asking whether Google’s response really addresses the concerns that have been raised. Complaints in competition law cases usually come from competitors.”

In the case of the EC investigation, three firms – price comparison site Foundem, French online legal services guide, and Microsoft-backed German portal Ciao – complained that Google is using its market power to limit competition their ability to compete.

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