European Commission Vice President for Competition Joaquin Almunia recently warned the European Parliament that “Microsoft was investigated [for] 16 years, which is four times as much as the Google investigation has taken, and there are more problems with Google than there were with Microsoft” per the FT article: “EU antitrust chief says Google case may be bigger than Microsoft.”
Why would the EC view Google as a bigger problem than Microsoft ever was?
- Conflicts of Interest: Consumers are Google’s product, but consumers are Microsoft’s customer. To get access to users’ private information, Google has long claimed its #1 priority is to “focus on the user” not its own “bottom line.” However, virtually all of Google’s profitability comes from serving advertisers’ interests. Google’s a bigger problem because they have made blanket public assurances to users to gain their trust, and then Google routinely has violated those foundational assurances and trust as complainants have proven. Simply, Google routinely misleads the public about whose interests it really serves; so why wouldn’t Google also mislead the public about the objectivity of its search rankings and its diversion of Internet traffic to favor Google’s content over competitors?
- Business Model: Surveillance for hire is Google’s business model. Microsoft’s is selling products/services to consumers/businesses. Thus Google’s business and financial interests view data protection, privacy, and security as bothersome obstacles and inefficiencies to Google’s targeted advertising model. In contrast, Microsoft’s financial interests are aligned with consumers’ interest in safeguarding their privacy, data, and security.
- Ambition: Microsoft market ambitions were focused on software in the tech sector. Google’s uniquely ambitious “mission is to organize the world’s information” means it has 360 degree ambition, including but not limited to, advertising, content, distribution, software, cloud, shopping, travel, hospitality, communications, insurance, financial services, real estate, transportation, delivery services, energy services, satellites, military contracting, artificial intelligence, robotics, health care, genomics, wearables, etc. (For the full details of Google’s unique global ambitions click here.) Does this omni-ambition look like a “focus on the user?”
- Honest Broker? Google’s core economic function as a business is as a broker between information/content providers, advertisers and users. However, Google never publicly acknowledges or discloses its many real business conflicts-of-interests, nor does it abide by its obligation under EU law as a dominant Internet provider of search, digital advertising, mobile, video and maps, to not abuse its dominance by preferencing Google content in Google’s purported “objective” search rankings. Microsoft’s core economic function as a business is to supply goods/services directly to those that demand and pay for them.
- Vertical Leverage: The U.S. DOJ prevented Microsoft from acquiring vertical market power by blocking Microsoft’s acquisition of Intuit’s Quicken in 1995. In stark contrast, the U.S. FTC effectively embraced and facilitated Google’s acquisition of vertical market power in advertising: by approving (4-1) without conditions Google’s acquisition of DoubleClick in 2007 which in one acquisition provided Google with most all of the advertiser, web-publisher and user relationships that Google did not have; and by approving Google’s acquisition of #1 mobile advertiser AdMob in 2010, despite “serious antitrust issues,” which in one acquisition ensured Google-Android’s mobile advertising dominance. The single biggest difference between Microsoft and Google, may be that Microsoft was a traditional horizontal sector dominance threat, where Google is a now a vertical economy-wide dominance threat. (For charts explaining this, see here.)
- Physical vs. Internet: In the 1990’s when the DOJ filed an antitrust suit against Microsoft it was still selling physical goods, packaged software loaded onto PCs, often at the manufacturer, so Microsoft was limited to real world physical network effects. Google, the first broadly dominant Internet company controlling 5 of the 6, billion user, global web platforms, is overwhelmingly an Internet company enjoying much more powerful Internet network effects that Microsoft never enjoyed: a universal global IP standard, minimal global border friction, unprecedented speed, scale and scope of Internet viral growth, and Internet winner-take-all dynamics, among others. While Microsoft was able to dominate PC operating system and office productivity tools, Google commands global leadership in 13 of 14 top universal commercial web functions: data collection, search, analytics, advertising, mobile, video, maps, browser, net infrastructure, consumer Internet of things, apps store, translation, and email, and is #2 & #3 in Social with YouTube and Google+. Everyone appreciates the profound speed and efficiency differences that the Internet offers over what preceded it.
- Sovereignty Arbitrage: Microsoft vigorously defended itself to the full extent of the law. However, Google actively games, thwarts, and slow-rolls EU enforcement processes under the public relations guise of full cooperation. Google views itself as, and acts like, a sovereign “digital superstate” in the way it often circumvents the letter and spirit of EU rulings by encouraging evasion of EU strictures by discouraging use of the .EU-specific domains, an encouraging evasion by using Google.com, whether it be in Google’s competition search settlement proposals, court right-to-be-forgotten rulings, etc.
- Privacy: Never before has Europe confronted a more defiant scofflaw of European data protection law. See Google’s world’s worst privacy rap sheet here. Just this year there have been sovereign data protection actions against Google in: France, UK, Germany, Netherlands, Spain, and Italy – in part for not disclosing to users what Google does with the data it collects. However, just last spring, Google’s Executive Chairman Mr. Schmidt made this blanket assurance to users on CNBC: “We actually don’t track people. We are very very careful to respect people’s privacy. We disclose exactly what we do.”
- Intellectual Property: Since Microsoft has always been in the business of selling proprietary software based on intellectual property rights, it respects the property of others. In stark contrast, earlier this year, Google was found guilty of violating EU competition law for refusing to license standards essential patents on fair and reasonable terms as Google had legally committed to do. Also consider the wide and varied property interests that have sued Google in court for stealing their property: Overture, eBay-Paypal, BuySafe, Skyhook Wireless, CamUp, Viacom, Apple, Oracle, Microsoft, wire services, newspapers, broadcasters, movie studios, authors, publishers, visual artists, software providers, photographers, artists, graphic designers, illustrators, and filmmakers.
- Accountability: Google is also unique for a multi-national in fostering a business culture of unaccountability within the company. Hear it in Google’s own words: We try not to have too many controls." "People will do things that they think are in the interests of the company. We want them to understand the values of the firm, and interpret them for themselves." said Nikesh Aurora, Head of Google European Ops FT 9-07. “People don’t want to be managed” said Google CEO Larry Page in In the Plex 4-11. “The word ‘control’ is not such a strong word at Google” said Google Chairman Eric Schmidt per the Telegraph 7-10. “In most cases… the [Google] default is not to use the most secure form because it slows everything down. … Ultimately we are not going to do anything that disadvantages speed,” said Google Chairman Schmidt YouTube 9-08.
In sum, the overwhelming evidence indicates that the EC faces the single most ubiquitous and defiant multi-national EC scofflaw in EC history.
Google Unaccountability Series
Part 0: Google's Poor & Defiant Settlement Record [5-1-12]
Part 1: Why Google Thinks It Is Above the Law [4-17-12]
Part 2: Top Ten Untrue Google Stories [5-8-12]
Part 3: Google's Growing Record of Obstruction of Justice [6-21-12]
Part 4: Why FTC's $22.5m Privacy Fine is Faux Accountability [7-12-12]
Part 5: Google's Culture of Unaccountability: In Their Own Words [8-1-12]
Part 6: Google Mocks the FTC's Ineffectual Privacy & Antitrust Enforcement [8-10-12]
Part 7: An FTC Googleopoly Get Out of Jail Free Card? [8-30-12]
Part 8: Top Lessons to Learn for Google Antitrust Enforcers [9-14-12]
Part 9: Google Mocks EU and FTC in Courting Yahoo Again [9-26-12]
Part 10: FTC-Google Antitrust: The Obvious Case of Consumer Harm [11-25-12]
Part 11: Why FTC Can't Responsibly End Google Search Bias Antitrust Investigation [11-27-12]
Part 12: Oversight Questions for FTC's Handling of Google Antitrust Probe [11-30-12]
Part 13: Courts Not FTC Should Decide on Google Practices (The Hill Op-ed) [12-10-12]
Part 14: Troubling Irregularities Mount in FTC Handling of Google Investigation [12-17-12]
Part 15: Top Ten Unanswered Questions on FTC-Google Outcome [1-3-13]
Part 16: Top Takeaways from FTC's Google Antitrust Decisions [1-7-13]
Part 17: Google's Global Antitrust Rap Sheet [1-31-13]
Part 18: Google's Privacy Words vs. its Anti-privacy Deeds [3-8-13]
Part 19: Google's Privacy Rap Sheet Updated - Fact-checking Google's Privacy Claims [3-13-13]
Part 20: DOJ & FTC Report Cards [4-12-13]
Part 21: The Evidence Google Bamboozled EU Competition Authorities [4-19-13]
Part 22: EU-Google: Too Powerful to Prosecute? Problems with Enabling Google [5-1-13]
Part 23: Google's proposed EU Search Bias Remedies: a Satire [5-17-13]
Part 24: Google's Antitrust Rap Sheet Updated [5-27-13]
Part 25: Is This the Track Record of a Trustworthy Company? See Google's Rap Sheet [6-6-13]
Part 26: Top Questions as DOJ-Google Criminal Prosecution Deadline Approaches [7-12-13]
Part 27: The Evidence Google Violated the DOJ Non-Prosecution Agreement [8-8-13]
Part 28: Implications of EU Ruling Google Abused its Search Dominance [9-27-13]
Part 29: Google-YouAd is a Deceptive and Unfair Business Practice [10-24-13]
Part 30: EU's Google Antitrust Problems Not Going Away [12-16-13]
Part 31: How the Google-EC Competition Deal Harms Europe [2-10-14]
Part 32: Open Letter to European Commissioners to Reject EC-Google Settlement [2-16-14]
Part 33: Google’s Extensive Cover-up [2-25-14]
Part 34: An Open Letter on Google’s Opposition to Distracted Driving Legislation [2-27-14]
Part 35: Google’s Widespread Wiretapping [3-20-14]
Part 36: The Growing EC-Google Competition Settlement Scandal – an Open Letter [3-31-14]
Part 37: Google’s Glass House [4-14-14]
Part 38: Google’s Titan Spy-Drones Mimic Military Spy Planes [4-17-14]
Part 39: Google’s Anti-Competitive Rap Sheet Warrants Prosecution not Leniency [4-30-14]
Part 40: Google Apps for Education Dangers [5-17-14]
Part 41: Google AdSense Lawsuit Spotlights the Corruption of Unaccountability [5-23-14]
Part 42: Six Ways the FTC is AWOL on Google [7-16-14]
Part 43: Fact-checking Google’s Public EC Competition Defense [9-21-14]