Microsoft to EU: Google’s Ad Practices Are Anticompetitive

Microsoft has filed a formal complaint with the European Commission claiming its search rival Google is abusing its dominance of the search market in the continent.

The Commission is already in the process of investigating Google’s practices following complaints from other companies operating in the space, which alleged the search giant has been demoting organic search rankings for rival vertical search services while giving preferential treatment to its own.

In a blog post published this week, Brad Smith, Microsoft’s SVP and general counsel, wrote, “Microsoft is filing a formal complaint with the European Commission as part of the Commission’s ongoing investigation into whether Google has violated European competition law,” adding, “Google has done much to advance its laudable mission to ‘organize the world’s information,’ but we’re concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative.”

Smith provided five examples of Google’s alleged anti-competitive behavior, which included restricting competing search engines from indexing YouTube effectively, preventing Microsoft’s new Windows Phone 7 operating systems from accessing YouTube metadata such as video categories and ratings, and prohibiting advertisers from exporting their data for use with other search ad platforms, such as Microsoft’s own adCenter.

Announcing its official investigation in November, the Commission said it would examine “suspected restrictions on the portability of online advertising campaign data to competing online advertising platforms,” as well as exclusivity obligations imposed on its advertising partners regarding the placement of competing ads.

Speaking with ClickZ at the time, Douglas Lahnborg, competition partner at law firm Orrick, Herrington and Sutcliffe, said the Commission’s actions indicated considerable concern regarding the company’s practices. “The Commission has taken the step to launch a formal investigation now, which means they consider Google’s alleged abuse a priority… The Commission’s opening of [a formal investigation] is clearly of serious matter for Google,” he said.

Given that the Commission’s investigation is already underway, it’s unclear how much of an impact Microsoft’s complaint will have on that process.

Microsoft has found itself subject to intense scrutiny from European regulators over the years, but this complaint represents the first time it will have filed a formal complaint of its own. Smith suggested the company’s own experiences with the Commission might therefore lend weight to its argument, stating “more so than most, we recognize the importance of ensuring that competition laws remain balanced and that technology innovation moves forward.”

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