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Originally published March 30, 2011 at 10:28 PM | Page modified March 31, 2011 at 6:32 AM

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Microsoft to file antitrust complaint against Google in Europe

The wheel of technology history turns remarkably fast. Microsoft, whose domination of the technology industry provoked a landmark federal antitrust case, is crying foul against Google and urging European Union antitrust officials to go after the search giant.

The New York Times

The wheel of technology history turns remarkably fast. Microsoft, whose domination of the technology industry provoked a landmark federal antitrust case, is crying foul against Google and urging European Union antitrust officials to go after the search giant.

Microsoft plans to file a formal antitrust complaint Thursday in Brussels against Google, its first against another company. Microsoft hopes that the action may prod officials in Europe to take action and that the evidence gathered may also lead officials in the United States to do the same.

In Europe, Microsoft is joining a chorus of complaints, but until now mainly from small Internet companies that say Google's search engine unfairly promotes its products over rival offerings.

The Internet and smartphones are the markets where energy, investment and soaring stock prices reside. Microsoft is pouring billions into these fields, especially Internet search. Yet the champion of the PC era trails well behind Google.

"The company that was the 800-pound gorilla is now resorting to antitrust, where it is always the case that the also-rans sue the winners," said Michael Cusumano, a professor at the Massachusetts Institute of Technology's Sloan School of Management.

The Microsoft complaint, Cusumano notes, is also a reminder of the comparative speed with which fortunes can shift. "It doesn't happen instantly, but it does happen faster than in most industries," Cusumano said. "It took Google about a decade to really turn the tables on Microsoft."

For years, the giant of personal-computer software battled competitors and antitrust regulators in America and abroad, parrying their claims that it had bullied rivals and abused its market muscle. In the United States, it suffered rulings against it, and in 2001 it reached a settlement that prohibited Microsoft from certain strong-arm tactics. In Europe, Microsoft absorbed setbacks and record fines.

Still, irony has no place in antitrust doctrine. Microsoft's complaint must be weighed on the merits, as part of a wide-ranging antitrust investigation of Google, begun last year and led by Europe's competition commissioner, Joaquin Almunia.

The litany of particulars in Microsoft's complaint, the company's lawyers say, includes claims of anticompetitive practices by Google in search, online advertising and smartphone software. But a central theme, Microsoft says, is that Google unfairly hinders the ability of search competitors — and Microsoft's Bing is almost the only one left — from crawling and indexing information that Google controls, like YouTube.

Such restraints, Microsoft contends, undermine competition — and thus pose a threat to consumer choice and better prices for online advertisers.

When told of the Microsoft claims, Adam Kovacevich, a Google spokesman, denied that the company had done anything wrong and said its practices did not deny Microsoft access to Google technology and content.

In smartphones — sources of increasing volumes of search traffic — Microsoft says Google is withholding technical information needed to let phones using Windows Phone 7 software have a rich, full-featured application for YouTube. That technical information, Microsoft says, is available not only in Google's Android software but also Apple iPhones, as part of a deal dating back to when Google's chief executive, Eric Schmidt, was on the Apple board.

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Kovacevich said that about two years ago, the company decided to make an improved version of YouTube available for all mobile devices instead of tailoring it to each company on smartphone applications, as it did earlier with Apple.

Microsoft also contends that Google has set up what amount to technical roadblocks so that Microsoft's Bing search service cannot crawl and index up to half of the videos on YouTube.

Another Microsoft claim focuses on Google's ad contracts. Its contracts prohibit advertisers and online agencies from using third-party software that could instantly compare results and move advertisers' data from one ad platform to another — from Google's Adwords to Microsoft's Adcenter, for example.

The Google spokesman said the company does allow advertisers freedom to move data freely, and the restraint on third-party software is to maintain the consistency of Google's ad service.

Microsoft, said Bradford L. Smith, Microsoft's general counsel, is filing its complaint in Europe partly because it has an overall antitrust investigation of Google under way. In Washington, antitrust reviews of Google have focused on individual business deals rather than a pattern of conduct.

But Smith noted that Google's market share in search in Europe is higher than in the United States.

Microsoft, he added, plans to make sizable investments and efforts in the European market. "But if we're going to get a more competitive market there, European regulators are also going to have to take steps to establish a level playing field."

Google's large market share in search, legal experts say, does invite antitrust scrutiny. If Microsoft's claims are accurate, they could raise issues for Google, especially in Europe, where antitrust regulators tend to move more quickly to restrain the behavior of dominant companies.

Still, antitrust regulators look for evidence not only of an unfair advantage but also of less consumer choice and higher prices.

"You do need to show consumer harm," said Herbert Hovenkamp, an antitrust expert at the University of Iowa College of Law. "That becomes more difficult with search engines, where it is easy for consumers to switch to another search engine."

Google agrees

to privacy program

WASHINGTON — Google has agreed to adopt a comprehensive privacy program to settle federal charges that it deceived users and violated its own privacy policy when it launched a social-networking service called Buzz last year.

The settlement announced Wednesday with the FTC requires Google to study both its existing services and any new services it launches to determine if they pose risks to user privacy — and develop policies to address those risks if they do.

The settlement mandates independent audits to oversee and verify Google's privacy program every other year for the next 20 years. The settlement also requires Google to obtain user consent before sharing consumer information with third parties if it alters a service to use the data in a way that would violate its privacy policy.

The Associated Press

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