Microsoft is not sharing its toys. That’s the summary of the latest development in the Department of Justice’s (DoJ) antitrust probe against Google. It filed the lawsuit against the Pixel maker in October 2020, as the regulator and a smattering of state attorneys accuse the search engine giant of choking competition.
The Mountain View-headquartered company has tried to defend itself by subpoenaing documents from Microsoft. Now Google is accusing the Redmond-based software developer of turning down the requests for no good reason.
The news comes as regulators and lawmakers are increasingly going after Silicon Valley for anti-competitive behaviours, as highlighted by recent GlobalData thematic research.
“While regulators have attempted to take on Big Tech before, there is a growing consensus that new antitrust rules and approaches are needed to address the complexity of the digital economy,” the researchers wrote.
Google and Microsoft dust-up
The recent spat between Google and Microsoft is quite easy to understand. Mountain View wants Redmond to send over files of 19 Microsoft employees. It argues that these files will help it determine why Microsoft’s Bing search engine has failed to compete with Google. It believes it was either because Bing faced unfair disadvantages or because it was simply not that good of a rival. The latter would be a good sign for Google.
It also subpoenaed files on Microsoft Explorer and Edge. Google filed the subpoena three months ago, but hasn’t heard back from Microsoft since, according to a filing to the court on Thursday.
Mountain View claimed the 19 Microsoft custodians were “highly likely to possess relevant, non-cumulative documents.” In particular, the company said these individuals could shed light over Microsoft’s development of its own search engines.
Google also wanted to find out more about Microsoft’s attempts to market devices that would provide more access points for Bing, beyond desktop access.
Microsoft responded to the claims on Thursday. It alleged that Google’s additional requests would bring the total number of custodians, whose files Microsoft will have to search, to 55. However, Redmond said Google had failed to provide “specific reasons” for why these additional files are necessary.
As of March, Bing had a 2.71% share of the worldwide search engine market. It’s dwarfed by Google’s 91.95% cut.
The bigger Google case
The DoJ sued Google in October 2020, with the regulator accusing Mountain View of having “unlawfully maintained monopolies” by using its market dominance to choke competition.
“Competition in this industry is vitally important, which is why today’s challenge against Google – the gatekeeper of the Internet – for violating antitrust laws is a monumental case both for the Department of Justice and for the American people,” then-attorney general William Barr said at the time.
The DoJ particularly took issue with “exclusivity agreements that forbid pre-installation of any competing search service” and forced pre-installation of its search apps on smartphones and making them undeletable, regardless of consumer preference.
The DoJ also raised concerns about Google’s “long-term agreements with Apple”. The regulator believed the deal made Mountain View’s search the default and “de facto exclusive” search engine on the Safari browser and other Apple search tools.
In other words: Google is accused of swinging its weight around to keep competitors like Microsoft off devices or to provide them with little room to manoeuvre.
If that sounds familiar, it’s because it should. The European Commission levied a €4.34bn fine against Google in 2018 for basically the same reasons.
“These practices have denied rivals the chance to innovate and compete on the merits,” Margrethe Vestager, executive vice-president at the European Commission, said at the time. “They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules.”
One of the consequences of the European case became apparent this summer when Google begrudgingly opened up Android phones to rival search engines, enabling them to be the default search engine of choice.
The DoJ filed its lawsuit in participation with state attorneys general offices in Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas.
Big Tech reg coming
Lawmakers in general are clamping down on Big Tech around the world. Not only are they investigating Silicon Valley firms, but they are also drafting legislation to reel in the powers of Big Tech.
Google alone faces probes about alleged antitrust behaviours in the adtech space. It has also been fined by French regulators for similar behaviours. Google is also staring down the prospect of being pursued by US state attorneys for suspected antitrust breaches in the Play Store.
On the legislative side, five bipartisan bills backed by the White House are currently making their way through the US senate. Across the pond, Brussels is busy working on the Digital Services Act and the Digital Markets Act, both aimed at reeling in the power of Big Tech.
Speaking with Verdict, GlobalData analyst Laura Petrone recently said that there were several reasons why this push is happening now. Firstly, Covid-19 made it flagrantly clear just how dependent companies and societies at large are on the digital services provided by San Francisco.
Secondly, these companies have also grown to sizes where they can now encompass several sectors, such as social networking, ecommerce and entertainment, meaning they can now arguably claim to have de facto monopolies.
“At the same time the renewed antitrust action is the result of a long debate around existing competition law needs and how these need to be adapted to the challenges of the digital economy, where tech giants thrive thanks to their extensive, established customer networks and low-cost capital,” Petrone said.
Google may win its spat against Microsoft and subsequently against the DoJ. Even so, its regulatory challenges won’t end anytime soon.
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