10 Reasons Why Google Is Supplanting Microsoft as a Legal Target

By Don Reisinger  |  Posted 2010-02-25

10 Reasons Why Google Is Supplanting Microsoft as a Legal Target

Since the 1990s, Microsoft has been the world's legal bombing range. After Windows gained popularity and applications such as Internet Explorer were bundled with the operating system, government regulators, technology pundits and folks who closely follow the industry claimed Microsoft needed to be taken down before it was too late.

For years, the company battled it out to maintain its standing as a dominant player in the market. It was a long battle, but aside from some prolonged sniping with European Union regulators, the company is losing its hard-earned standing as the world's favorite judicial punching bag. 

That title now belongs to Google. The Web giant has faced several legal challenges throughout the years. Some have even said the company needs to be stopped before it totally controls revenue generation on the Web. For a while, it seemed like Google didn't deserve to be the target of all those lawsuits. After all, Microsoft was the hated company and Google was beloved. Why would anyone pick on Google?

But in recent years, the legal issues the search giant has been forced to deal with have grown in seriousness and quantity. And although it has so far emerged largely unscathed, Google will continue to face legal issues both now and in the future. Here is how it happened.

1. Google's Web standing

If Google didn't control nearly 70 percent of all Web searches in the world, most regulators probably wouldn't pay much attention. But it does. Similar to Microsoft's dominance in the operating system market, Google's control over search is alarming. The company's slogan of never being evil is fine and all, but dominating the extremely profitable search market allows it control that most regulators don't like a company to have.

2. Microsoft's reduced dominance

Microsoft isn't the target that it once was. Make no mistake, Redmond is still extremely powerful in the business. But companies like Apple and especially Google have whittled away at Microsoft's share of the operating system, browser, mobile and Web markets. Microsoft isn't quite the dominant force in the industry that it once was. But that doesn't mean regulators aren't keeping an eye on Microsoft anymore. It might mean that after being burned multiple times, Microsoft is trying harder not to draw regulators' attention.

3. There is cause for concern

Although Google likes everyone to believe that it's always the innocent party and there is no reason to doubt its intentions, there just might be. Google has been embroiled in several privacy complaints over the years. The company has also been working its way into several industries, including building its own fiber network to compete with ISPs. Google isn't just a search company anymore and some folks are wondering how much further it can go without being held up.

4. The advertising business

At the recent Mobile World Congress, in Barcelona, Spain, several carriers spoke out against Google's advertising practices. They complained that by not sharing advertising revenue the company generates from its mobile phones, it's leaving carriers out of the money-making process. That wasn't the first time Google has been targeted over its advertising. The company's DoubleClick acquisition was the subject of much debate. Small advertising networks are speaking out against Google's control over so many advertising dollars sweeping across the Web. It might not be long before Google's advertising intentions are called into question by the international community.

The Target Keeps Growing Larger

5. Google as a content provider

Part of the debate in Google's recent privacy case in Italy revolves around whether the company is a content provider or a resource for Web users. Google contends that it's the latter. The Italian government argues the opposite. But the reality is, Google is offering mobile operating systems. It's an advertising juggernaut. It delivers Web-based services. It even operates a social network. Its search might still be a resource, but as a company, Google is much more.

6. Microsoft has been beaten up

Microsoft isn't as viable a target as it once was. As mentioned above, Microsoft's significance in the tech industry has been reduced somewhat. That's partly due to all the lawsuits the company has faced throughout the years. It seems regulators have targeted almost all of the problems they had with Microsoft. Now they're moving on to Google.

7. Privacy and Google

Privacy has been a constant concern with Google throughout the years. It's also a hot-button issue for world governments. Most recently, Google faced criticism over Google Buzz, its social network. Critics expressed concern that the social network shared users' most frequent contacts with friends by default, and friends were automatically added to the users' profiles. That's not an isolated incident for Google. And governments know it. Perhaps that's why the company's battle with Italy is so important to both sides.

8. The power of free

A major reason for Google's success is all of its free services. We can't discount that. Whereas consumers would need to save up to get some of Microsoft's products, accessing Google's services is as simple as starting up a browser and surfing to the desired offering. All the while, Google is capitalizing on each of those users. By becoming the go-to freebie-offering company on the Web, Google has built a hugely influential enterprise, and some find that level of success troubling.

9. The halo effect

Google's dominance begins with search. Thanks to the usability of its search service, users are becoming more and more willing to use other Google services. That's cause for alarm for many government regulators. By building upon search, Google can use all of its many services to further dominate the advertising market. And by dominating the advertising market, Google could eventually wield even greater control over the Internet. It's that's scary.

10. It's about money

In the end, legal issues come down to money. Government regulators don't usually target weak companies that have minimal market impact. In most cases, they target companies that are generating massive amounts of revenue and have little fear of competition. Google is such a company.

Of course, whether or not lawsuits will slow Google down is up for debate. But as the company continues to generate more and more revenue through its services, the target on its back will grow much larger.

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