The battle between Google, Inc. and Microsoft Corp. has now kicked into high gear on both sides of the Atlantic.
On Tuesday, Google acknowledged that European antitrust regulators had opened an inquiry into its business practices, at the behest of some Microsoft-connected firms. The announcement of the European probe comes after recent disclosures that German antitrust authorities were investigating similar claims.
In the U.S., Google has not had it any easier. Earlier this month, Google was hit with its second U.S. antitrust lawsuit brought by the same lawyers who have long advised Microsoft.
In January, Google filed suit against a comparison shopping site myTriggers.com in Ohio state court, hoping to collect on $335,000 in unpaid bills.
Instead of paying the bill, myTriggers enlisted the help of both Microsoft’s antitrust lawyer, Rick Rule at Cadwalader, Wickersham & Taft, and famed trial lawyer Stanley Chesley, who worked on several of the largest settlements of the past few decades including those for the Lockerbie bombing and Dow Corning’s injury-prone silicone breast implants.
The company then filed a counterclaim earlier this month accusing the search giant of violating antitrust laws by manipulating search results to punish potential rivals.
“Google employs a variety of exclusionary acts that ensure that rivals cannot divert traffic to their own competing search websites, particularly if the effect of such diversion is substantially to compete against Google’s dominant platform,” myTriggers said in its complaint.
Rule also advises another search engine, TradeComet.com, which filed a similar suit against Google in a New York federal court last year.
Observers have questioned both lawsuits’ ties to Microsoft, but in an interview with Main Justice, Rule denied Microsoft’s interest in either matter.
“Microsoft is not involved,” he said, “our clients are only the named plaintiffs.” Rule declined to explain how his firm was hired in either case, but did say: “It is my practice to answer phone calls, and I’ve been blessed that I haven’t had to go out and elicit clients.”
Microsoft-related entities also appear to be going after Google on the other side of the Atlantic.
In a blog post last night, Google acknowledged that it had received word from the European Commission that it was investigating complaints filed by three companies accusing Google of manipulating its search rankings to punish other search engines and engaging in other anti-competitive conduct.
“This kind of scrutiny goes with the territory when you are a large company,” wrote Google senior competition counsel Julia Holtz, on the company’s blog.
In her discussion of the investigation, Holtz fingered Microsoft as the unseen hand directing the complainants. One, a U.K.-based shopping search site called Foundem, is part of a Microsoft-backed organization called ICOMP, she said. Another, a search engine called Ciao!, was bought by Microsoft in 2008. The third company is a French legal search engine, ejustice.fr.
The attacks against Google are reminiscent of similar campaigns against Microsoft over the past two decades.
“It’s not surprising that Google would start to see lawsuits, and it’s ironic that Microsoft is trying to foist upon Google the experience it had,” Andrew Gavil, a professor at Howard University’s law school, said in an interview.
But just how much Google’s experience will mirror Microsoft’s is unclear.
“In contrast to Microsoft, you don’t have a clear package of conduct that is identified as being anticompetitive,” Gavil said. ”For all the discussion on Google, no one can point to the core group of anti-competitive conduct. Individual firms are complaining about practices particular to them, but there is no broad based attack on the market.”
Industry groups that have long been a part of tech antitrust battles also said Google’s conduct did not raise as many concerns as previous investigations.
“We have for over 30 years been involved in fighting the biggest and most abusive monopolies and industry heavyweights who have abused their power,” said Edward Black, president of the Computer and Communications Industry Association, which counts both Google and Microsoft as its members. “We do not see Google’s behavior fit that pattern.”
In its lawsuit last year, TradeComet alleged that Google massaged its Web site ratings, known as quality scores, to make TradeComet’s ads prohibitively expensive once it realized the company posed a potential threat to its business.
Google says a Web site’s quality score is based on the number of users that have clicked on its link in the past, and search advertising analysts have said there usually is a strong correlation between the two.
MyTriggers’ case also accused Google of punishing its site in search rankings, but it goes further. The complaint argued that Google entered into “favorable agreements” with Shopping.com, Shopzilla.com, PriceGrabber.com, Ask.com, Aol.com and others but discriminates against other search websites.
The complaint alleged Google entered into “horizontal agreements” with some rivals to use the same quality score for certain advertisers. It further accused Google of maintaining a secret “whitelist” of firms that are blacklisted by it and the other search sites it has agreements with.
Since March 2008, according to the complaint, myTriggers rates to advertise on Google and other search sites rose between 1,000 percent and 10,000 percent.
The TradeComet complaint included accusations of one similar partnership, between Google and Business.com, but a executive from that Web site told the New York Times last year it had no special relationship with Google.
Whether such agreements violate any laws might have to play out in court. “There is nothing wrong with partnership agreements, there’s no abstract reason that these need to be illegal, but if it was tantamount to an agreement on price,” there could be a problem, said Geoffrey Manne, a former Microsoft lawyer who is now a professor at Lewis & Clark Law School in Portland, Ore.
Rule said he looked forward to his day in court. “The complaint speaks for itself. The whole point of litigation is a plaintiff’s ability to prove its case, and to be awarded damages for the violation,” Rule said. “That’s what this is about.”
Last year, Wired magazine detailed Microsoft’s efforts to tar Google’s reputation.