The Economist Technology giants at war Another game of thrones Google, Apple, Facebook and Amazon are at each other’s throats in all sorts of ways

Case Against Google May Be Undercut by Rapid Changes in Technology

APRIL 15, 2015

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Farhad Manjoo

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The antitrust case against Google filed by European Union regulators on Wednesday will inevitably draw comparisons to the long-running prosecution of Microsoft, in which regulators on both sides of the Atlantic pursued the software giant for anticompetitive behavior.

But Margrethe Vestager, the European Union’s competition commissioner, may not find the comparison entirely flattering. With more than a decade of hindsight, the theories supporting the case against Microsoft have all but fallen apart, and the pursuit of the company that makes Windows may suggest a reason for skepticism about this fight against Google: The tech marketplace is fluid and unpredictable. The giants that look most unbeatable today could falter in ways that may once have seemed unthinkable — and without a lot of help from the government.

“In the Microsoft case, if they’d just waited a while, the problems they thought they saw would have disappeared because technology, consumer behavior and the market demand changed enough to correct those problems,” said Geoffrey A. Manne, executive director of the International Center for Law and Economics, a policy research organization that has received funding from technology companies including, in the past, Google. In a 2013 law review article comparing the antitrust pursuit against Google to the Microsoft case, Mr. Manne was more succinct: “Microsoft’s market position was unassailable ... until it wasn’t.”

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How Europe Is Going After U.S. Tech Giants

The biggest American tech companies face intensifying scrutiny by European regulators, with — pressure that could potentially curb their sizable profits in the region and affect how they operate around the world.


The same, he said, could turn out to be true of Google. The rise of mobile devices and the prevalence of apps could make the traditional search engine less central. And if the regulators emerge victorious, they could end up constraining Google in a way that makes its services less useful to consumers — which would be a hollow victory indeed.

The similarities in the cases against Microsoft and Google are striking. Microsoft once had a dominant position in the worldwide market for computer operating systems: Windows was installed on nearly 90 percent of desktop computers. Google’s current position in the market for web search engines looks similarly unbeatable: The company claims nine out of every 10 searches in Europe.

In 1999, a federal judge ruled that Microsoft had abused its operating system monopoly by pushing users into some of its other products, especially its web browser, Internet Explorer. The court found many instances of unfair competition against Intel, Apple, IBM and Netscape. Among other bits of mischief, Microsoft blocked Netscape Navigator, then the dominant browser, from getting crucial technical hooks into Windows.

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Now Google is said to have behaved in a similarly abusive way. In a 2012 report by Federal Trade Commission staff members that was recently uncovered by The Wall Street Journal, regulators found that Google increased the prominence of its services above competing “vertical search engines,” like those for shopping, travel and local services.

The investigation also found that Google brazenly copied content from competitors to improve its services. For instance, the company used Amazon’s product rankings to determine how to rank products in its own shopping search engine. The F.T.C. and Google later settled. Still, the European Commission’s new charges echo the F.T.C.’s claims.

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Google Accused of Cheating Competitors

Google Accused of Cheating Competitors

Margrethe Vestager, the European Union’s competition commissioner, accused Google of distorting Internet search results and began an antitrust investigation into its Android mobile operating system.

By Reuters on Publish Date April 15, 2015. Photo by John Thys/Agence France-Presse — Getty Images.

These actions are not necessarily as terrible as they seem. In 1999, Microsoft argued that bundling its web browser with its operating system was good for consumers who needed a way to easily get on the Internet. In retrospect, that looks defensible — today, every computer, tablet and smartphone ship with built-in browsers, because everyone believes they are an important aspect of the user experience of computers.

Google argues, similarly, that giving people answers to shopping and travel queries on its main search results page is much more helpful than giving them a bunch of links to competing search services.

Some observers agree. “The analogy I like to use is, complaining that Google is lifting its own vertical search engine over other vertical search engines would be like complaining that The New York Times is not carrying The Los Angeles Times’s sports section,” said Danny Sullivan, founder of Search Engine Land, an online publication that tracks the search industry. “You don’t expect The New York Times to carry a rival sports section. But you do expect it to have a sports section. When people go to a search engine, they’re looking to search across everything.”

As Google pointed out in its response to the European filing, linking to its own services has not destroyed its rivals. Google Travel, for instance, is still far less popular than competitors.

As powerful as Microsoft looked at the time, officials missed ways in which it was vulnerable. For starters, they didn’t anticipate the rise of mobile devices. The 1999 ruling against Microsoft found there were “no products, nor are there likely to be any in the near future” that people around the world could use as “substitutes” for Windows computers. In fact, within a few years, unexpected rivals began making such substitutes. In 2007, Apple released the iPhone, and soon after, Google released the Android operating system, which Samsung, HTC, Motorola and other manufacturers used to take the smartphone global and mainstream.