Google Settles FTC Antitrust Probe Today: Microsoft Launches Broadside

As most readers are aware, Google and Microsoft have had a running confrontation for the past couple of years. However, Microsoft has fought this particular battle with Google from the unfamiliar position of underdog in the brave new world of smartphones and tablets.

A few days ago, Microsoft Vice President & Deputy General Counsel, Dave Heiner, launched a broadside against Google, expressing bitterness against Google’s unfair practices and specifically blocking Microsoft from developing a YouTube app for Windows 8, while refusing to develop one themselves.

Here is what Heiner said in his blog post;

Despite government scrutiny, Google continues to block Microsoft from offering its customers proper access to YouTube. This is an important issue because consumers value YouTube access on their phone: YouTube apps on the Android and Apple platforms were two of the most downloaded mobile applications in 2012, according to recent news reports. Yet Google still refuses to allow Windows Phone users to have the same access to YouTube that Android and Apple customers enjoy. Microsoft has continued to engage with YouTube personnel over the past two years to remedy this problem for consumers. As you might expect, it appears that YouTube itself would like all customers – on Windows Phone as on any other device – to have a great YouTube experience. But just last month we learned from YouTube that senior executives at Google told them not to enable a first-class YouTube experience on Windows Phones.

These are serious accusations, but then again, Google hasn’t exactly denied them too vigorously. Google’s top management have said publicly that they do not intend to produce any apps for Windows 8 because the market just isn’t there.

Technically, that is true since Windows 8 only accounts for 1.05% of the smartphone market, according to Netmarketshare.com. However, many felt it was not unconnected to Microsoft’s ad campaigns deriding Google and in particular, representations to the Federal Trading Commission that Google violated antitrust guidelines and engaged in unfair trading practices. As examples, Microsoft said, Google unfairly gave more weight to its products in search results and used 3 patents to hinder competition.

Respite for Microsoft may be coming however, from an unlikely source – the EU. Let me explain. Both Europe and the FTC have accused Google of unfair behavior. Both investigations are ongoing.

As is typical of the US FTC, they were about to give their typical slap on the wrist to Google in 2012, but public outcry (and Google’s enemies) drove them to extend the investigation and possibly levy heavier penalties.

The news today, according to sources at Bloomberg is that Google will settle with the FTC today, January 3, the probe into its unfair competitive practices. Google apparently, will settle with a consent decree and a voluntary agreement regarding its use of three patents to stymie its competition.

The drive by Google to settle quickly is so that the FTC will not adopt even heavier penalties that may be handed down by the the EU later this month.

In this there may be hope for Microsoft that Google will relent as a part of their consent decree and either allow Windows Phone 8 and Windows 8 apps to replace YouTube, Google Maps and other Google apps and/or develop versions of those apps for those platforms.

In either case, Microsoft stands to benefit.

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