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February 25, 2009 1:40 PM

Google's EU Gambit Is Stupid



News Analysis. Yesterday, Google asked to further help European trustbusters hang Microsoft. Yeah? What goes around comes around.

Google has long cooperated with the European Union Competition Commission and its investigations of Microsoft, but from the sidelines. My reliable sources were clear on this months ago. I blogged about Google's participation, again, on Jan. 16. Late yesterday, Feb. 24, Google's further participation made big headlines everywhere because of a blog post by Sundar Pichai, who is Google's vice president of Product Management.

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Sundar wrote, "We are applying to become a third party in the European Commission's proceeding." Meaning: Google would like to actively help craft the next remedy for Microsoft antitrust violations.

Google is setting itself up for a big fall by gunning for Microsoft this way. The search giant is engaging in competition by litigation with a governmental organization that has no legal or public mandate to reciprocate anything. In fact, Google is likely to be investigated by the European Commission some time in the near future. Google's search share, which is higher in many European countries than in the United States, is reason enough for the EC to open an antitrust investigation. It's not a matter of if but when.

Google's further participation in the case most certainly will cause Microsoft problems on the continent. In mid-January, Microsoft received a Statement of Objections stemming from an antitrust investigation opened about a year earlier. The EC communication all but assures an adverse ruling for Microsoft—that bundling Internet Explorer with Windows violates local antitrust laws. Microsoft is guilty, so to speak, or will be found to be. It's the punishment—or in legal parlance, remedy—that must be determined now. It is that process Google wants to participate in. Mozilla also has expressed interest in joining the remedy process.

Sundar gave some of Google's reasons for participating in the process:

Browsers are critical to the Internet...Google believes that the browser market is still largely uncompetitive, which holds back innovation for users. This is because Internet Explorer is tied to Microsoft's dominant computer operating system, giving it an unfair advantage over other browsers. Compare this to the mobile market, where Microsoft cannot tie Internet Explorer to a dominant operating system, and its browser therefore has a much lower usage.

He's wrong, by the way. There is a lot of fresh competition in the browser marketplace. New versions of Firefox and Internet Explorer are being beta tested. Yesterday, Apple released a beta of Safari 4, which is quite an exciting browser. Then there is Chrome, Google's new browser. All this competition occurs despite IE being bundled with Windows. Google is the major reason for renewed browser competition, because of paid search. Google search makes profitable the distribution of free browsers. Google benefits from increased search share and could gain more if not for IE bundling. Google's interest here isn't browser competition, but expanding its search dominance—heck, let's call it monopoly.

Sundar's mobile browser comparison doesn't work either. Internet Explorer is a simply terrible mobile browser, and Microsoft only develops it for one operating system anyway. IE even has low usage on Windows Mobile. Comment if you disagree. Everybody I know with a Windows Mobile phone uses another browser. Bundling assures no product usage. The bundled product must be good enough compared with alternatives, which mobile IE is not.

Sundar reveals Google's other hidden intention, particularly in context of the mobile browsing comparison: "We learned a lot from launching our own Google Chrome browser last year and are hoping that Google's perspective will be useful as the European Commission evaluates remedies to improve the user experience and offer consumers real choices."

Google wants to extend its browser's reach, and pull more search usage with it, by pushing Microsoft out of the way. The European Commission has the means in Europe. For Google, the future is as much about the mobile phone as the desktop, perhaps more. What does Google do with Android? Bundle its Chrome browser with the operating system.

Microsoft is pretty savvy at identifying competitors. Yesterday, Microsoft CEO Steve Ballmer told financial analysts in New York:

We'll see Google more as a competitor in the desktop operating system business than we ever have before. The seams between what's a phone operating system and a PC operating system will change, and so we have ramped the investment in the client operating system.

He's right. Android is coming to mininotebooks and netbooks, which makes sense. The mininotebook business model in Europe is carrier subsidies, just like cell phones. Whether they're running Android or Windows, Google wants Chrome on every one of those carrier-subsidized netbooks. That's Competition 101. Google's search monopoly would benefit.

I find it strange that Google wants to participate in a remedy process about tying. Google ties Chrome to Android and search to Chrome. The arguments Google would make about bundling could be later used by the European Commission against the search giant. Apparently, somebody at Google believes participation is worth the risk. Perhaps, legitimately. Microsoft is wrapping up Windows 7 development, and any remedy could delay release. Google would greatly benefit from the delay, particularly for Android distribution on mininotebooks.

[Please send your tips or rumors to watchtips at live.com.]

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Comments (20)

billybob :

"Google's search share, which is higher in many European countries than the United States, is reason enough for the Commission to open an antitrust investigation. It's not a matter of if but when."

The EC would have to respond to a complaint to investigate anything. Who would be complaining and what would the complaint be?

This case was in response to a complaint by Opera about standards and IE's lack of compliance with them.

"The arguments Google would make about bundling could be later used by the European Commission against the search giant."

This complaint was about MSIE 'standards' - how could a standards compliant Chrome be subject to the same complaint? They would have to get a monopoly on desktop operating systems first.

Here is the complaint in laymans terms.

"MS makes a browser which does not follow industry standards. These standards are not documented anywhere and some are covered by patents or rely on an underlying MS OS. Therefore, nobody else can make a browser which complies to Microsoft's standards.

Web sites use MSHTML because it was/is the most dominant browser. This locks out other browsers from the market."

If more people were to use standards based browsers then the web sites would use standard HTML and there would be competition in the browser market because people would have a real choice.

You only have to look at the number of businesses which are locked into IE 6 because some site they rely on used some MS standard (normally ActiveX).

"Google believes that the browser market is still largely uncompetitive"

He said largely uncompetitive, not that there is no competition. The fact that all the other browsers are light-years ahead in terms of speed and rendering and yet IE still has >60% share shows that the market is not working properly.

AndresFreeLaptop :

It would make more sense just for Google to sit back and watch the show without drawing attention to itself. Instead Google may be opening a pandora's box that it can't close. It is sort of like a citizen calling to report a city violation on their neighbor (like illegally burning debris), when they themselves are doing the same thing but on a different day.

TA :

Great article Joe - I'll remember to laugh at Google when the EU's spotlight turns on them.

Carlos :

@billybob

Who would complain to the EU about Google? Well, Microsoft could... Or they could do it indirectly...

Besides, like Joe said, if MS can't bundle IE with Windows, Goolge can't bundle Chrome with Android, Apple can't bundle Safari with MacOS (not to mention how they bundle MacOS with their computers), etc, etc, etc. Have no doubt that MS *will* make that point with the EU Comission.

Marco :

speaking about Google:
The Google Computer: Android Desktop Edition
http://www.pcmag.com/article2/0,2817,2341581,00.asp
Quote:
"But Microsoft long since missed that boat. Google can still release an Android Desktop or Android Netbook, or whatever. I'd like to see it. The topper would be offering Microsoft an opportunity to do MS Office for Android. That would be rich."

"This possibility all stems from the fact that Microsoft seems to have lost its way, coasting on its main cash cows and unable to do anything else confidently. To end on a positive note for
Microsoft, I've believed for years that the
company can effectively counter all this momentum by itself embracing Linux and doing a fully supported MS-Linux as a kind of competitive jujitsu. It's the only long-term solution to this slow death we seem to be observing."
----------------
To TA : We will laugh about many things.

Goblin :

With MSOffice and other cashcows (IMO) having viable open source alternatives, MS will have to make their money some way.
-
-
Microsoft Sues TomTom for Patent Infringement
http://www.pcmag.com/article2/0,2817,2341748,00.asp
-
Maybe their patent portfolio will come in handy if people wont buy their products.

I repeat:

Microsoft is declared Good because they built their monopoly on back-room deals and now can afford to buy politicians.

Google is declared Bad because their search is perceived as better and people flock to it of their own free will.

That's what is wrong with this country, and the world in general. If you are smart, hardworking, and productive, you are Bad. If you can rape, steal, and murder and get away with it, you are Good.

We are NOT in an economic crisis. We are in a period of adjustment in which an economy that was built using theft and stupidity as its foundation is falling apart. Duh....

@Goblin,
I wonder if Microsoft will sue my company for using their Intellectual Property even though the key pieces of our IP were invented before Microsoft existed. After all, we have no right to struggle and barely survive if those few dollars we earn could instead have flowed into Microsoft's billions in revenue.

Ballmer is headed for the dust bin of history. Unfortunately, he owns enough of the US Government to take a lot of us with him.

billybob :

@Carlos - The first part of my question was the easy part. The real part is 'what will they complain about?'.

Neither Android nor OSX have a monopoly so bundling is not a problem.

If Microsoft had a complaint to make then they would have made it by now. Even if it was very tenuous, look how long it took them to complain about the potential Google-Yahoo deal.

It could be argued that Google have a monopoly in search, but how are they abusing that? Apple may have a monopoly in portable music players, but again they are not abusing it. Both of those markets seem to work well, if I do not like Google, it is very easy for me to use someone else.

@billybob,

Exactly.

And it's not about the browser. It about Microsoft's desktop monopoly preinstalling IE and then pushing the world to create web sites that only work with IE, thus shutting down the ability of anyone else on any other platform from accessing those sites.

OS X + Safari doesn't constitute a problem, not just because it's not a monopoly, but because there are no Safari-only sites. There's no desktop monopoly to drive Safari-only sites to be common.

Chrome on ANY platform doesn't drive any sites to be Chrome only. And if perchance some Google site supports only Chrome, then developers with brains and talent (NOT most of the whiners who hang out here!) have the Chrome source free for the taking. Firefox incorporating what's needed from Chrome? Check. IE incorporating what's needed from Chrome? Check. Safari incorporating what's needed from Chrome? Check.

Now try that the other way around. Can Firefox or Safari developers incorporate the non-standard functions in IE to allow them to fully function as if IE clients, but on Mac or Linux? THAT is the issue. Not which freakin' browser that's installed. It's NOT about the browser. It's about lock-in to Microsoft and lock-out of competition.

Carlos is clueless. But you already knew that.

Briareusm :

Joe

While I agree with your statement that involvement in this is dangerous for Google, I disagree vehemently that there is competition for IE. All of the browsers you mention as competing with IE are all free: no one makes any money on them. The last commercial browser was Opera and look where it is now. Minuscule market share even when its free!
But IE is free too, you say. Absolutely not. If you want the latest version of IE in all its functionality you must spend at least $99 to upgrade to the next version of Windows. None of the other browsers can compete this way. Google cannot not force you to buy its browser if you want to use its search page.
Sorry Joe, but as long as none of these other browsers make a penny commercially the browser market in non-competitive.

RightPaddock :

@Briareusm
can you run Safari 3.1 on OS/9, I suspect not.

Is an OS9->OS X upgrade free, assuming you can even do it!

I know you can't run Safari 2 or 3 on Panther (OS X 10.3)

I'm using IE8 beta on WinXP and Vista, I'm not aware of any differences, that of course doesn't mean there aren't any. I'll grant that IE8 does not run on Win2K, but thats a relatively small number and most of them are still using IE 5 or 6.

As for all the other browsers being free, its been like that since 1992, Mosaic was free, it became Netscape and was free for a while, then it wasn't, then it was, then it was Firefox, and its free.

How come no-one complains about Windows having a Mail Client that includes a News Reader, and a Chat client and a bunch of Games (3 new ones with Win 7). What about the free Search Engine that buries itself in Office, where are the complaints about that. What about the News Reader software developers who've seen their businesses collapse because of Googles free Groups.

Has the EU nothing better to do with taxpayers money than to kick a dying horse. Why don't they take the Swiss banks to court for allowing tax evaders & fraudsters to hide their ill-gotten gains, I can guess why and I dare say you can too.

Pete Austin :

Javascript is the real issue, not HTML. Script runs so slowly on IE, compared to any of the other major browsers that it really limits what you can do in a Web page, if you want to appeal to 100% of users.

Google are trying to replace Microsoft desktops apps by Javascript-based alternatives, but the fact that most people start out with an unsuitable browser pre-installed gives Microsoft Office a big advantage. I can see why this would annoy Google.

Anonymouse :

Oooh, I'm sooo scared. (*rolls eyeballs*) I don't see anything sinister in this; the competition were screwed over through unlawful anti-competitive behavior and now they have an opportunity to make suggestions to improve things in the future. What I find really shameful is that there is still an MS tax throughout the world - I get charged for an inferior product that I neither need, want, nor use whenever I buy a new computer.

billybob :

P.S. Joe, your link on the Safari 4 text points to an article about Adobe 0-day vulnerabilities.

Seems Microsoft was right on target with IE and OS integration as finally confirmed by Google.

According to Lars Bak, who heads up development of Google Chrome's cornerstone javascript engine ...

"The web is becoming an integral part of the computer and the basic distinction between the OS and the browser doesn't matter very much any more', he says."

Peter Kasting :

What does "Google ties Chrome to Android and search to Chrome" mean? Android doesn't use Chrome (and can't use Chrome, there is no port to Android), and Chrome imports the user's default search engine from their existing browser (no preference to Google), prompts on first run to ensure the user knows how to change it, and ships with multiple non-Google search engines in every locale.

Me :

You know, all you haters really have a very one-sided and limited view of the world - which ultimately makes your comments as worthless as any pointless rant in the street: "That's what is wrong with this country, and the world in general. If you are smart, hardworking, and productive, you are Bad. If you can rape, steal, and murder and get away with it, you are Good." - stereotype much? I would wager a guess that there are lots of good things/products/innovations that came out of MSFT just as bad/mediocre things/products/services come out of Google and even #gasp!# Open Source... earth to you: the world is rarely black and white ... so please think before painting with the stereotype brush, will ya!

Also, "And it's not about the browser. It about Microsoft's desktop monopoly preinstalling IE and then pushing the world to create web sites that only work with IE, thus shutting down the ability of anyone else on any other platform from accessing those sites." Well, I would actually argue that this is not really as big an issue as you make it - because companies/service providers who depend on websites for revenue generation or want their website become popular can simply not afford to do the above - so they will not. If you talk about Microsoft trying to make them do that, that is a different matter, but the notion that nobody can escape from the "MSFT Trap" is patently wrong nowadays ... of course, coding for different browsers still puts a lot of extra grief and burden on the web designer/programmer, which ultimately is Microsoft's fault ...

Cheers
Me

billybob :

"because companies/service providers who depend on websites for revenue generation or want their website become popular can simply not afford to do the above"

They cannot afford to make their websites standards compliant, they spent millions on sites that worked mainly in IE 6 and now those same sites are not working properly in other browsers. It is not just websites either, there are a lot of CDROMs which rely on IE being installed to work.

Things have only changed very recently, I still have clients who do not care that their sites do not work on Firefox because they think it is not important. Banks are the worst offenders.

Which other browser pushes OS features and it's own special standards?

@[Microsoft] Me:

Re: "You know, all you haters really have a very one-sided and limited view of the world"

The desire for freedom is NOT a one-side and limited view of the world.

Except to dictators, megalomaniacs, wanna-be despots, and their legions of willing drones and slaves.

@[Windows] Me:

Re: "stereotype much?"

You call me one-sided and limited, and yet you are completely ignorant of the fact that my statement is NOT a stereotype but an observation of human behavior and interaction throughout history.

The ancient Spartans ensured that their soldiers-in-training were given somewhat less food than they needed to survive. They were expected to steal food to make up the difference. Those who refused to steal were judged unworthy. Those who stole and got caught were severely punished. Only those who stole were rewarded.

Look at many of the recent White House cabinet postings. Those people did NOT pay their taxes until AFTER they were caught. (Since they and their ilk wrote the tax code, not being able to understand it is NOT a valid excuse.)

Look at the 20 July incident in 1944 that tried and failed to kill Hitler. The conspirators were treated savagely and without mercy, and then executed. After the war, they were still considered to be traitors and their families received no pensions unlike the families of other military personnel. It was only many, many decades later that they are now revered as the patriots they truly were.

All classic cases of Good people being reviled and punished, and Evil being rewarded (in the short run, anyway). Stereotypes? Pull out a dictionary and some history books, if you are able to read.

Or worship Microsoft and blather on about how unfair it is to want to write and use software that Microsoft hasn't written as if it is some crime to have a brain and use it creatively without permission from Microsoft. Because that is all that your tiny brain has shown it is able to do.

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