Google Must Learn from Microsoft's EU Antitrust Battle: 10 Important Lessons

 
 
By Don Reisinger  |  Posted 2010-12-01
 
 
 

Google Must Learn from Microsoft's EU Antitrust Battle: 10 Important Lessons


The European Union has launched an investigation into Google over concerns that the company might have used its dominant position in the search market to benefit its own operation and hurt its competition.

Some of the company's competitors, including Microsoft, say that Google is modifying its search results to ensure its own services rank higher than the competition's. The EU also plans on examining whether Google is using its advertising service improperly. 

For its part, Google admits to no wrongdoing and has made it clear that it doesn't believe that its practices are anti-competitive. However other U.S. technology giants have fared badly in earlier EU antitrust investigations. Microsoft and Intel have been paid huge fines based on EU findings that they had engaged in anticompetitive practices in their European markets.  

Now it's Google's turn to prove that it isn't abusing its market power in Europe

That might be more difficult for the search giant than some might think. It's a huge company that's extremely rich and successful around the globe. That fact alone makes Google an inviting target for EU regulators. As Microsoft's own battles with regulators have shown it's not easy to prove that your company hasn't engaged in anticompetitive practices.

That's precisely why Google should examine what Microsoft went through and adapt its strategy based on that. There is much that Google can learn from Microsoft's regulatory problems. Here's why.

 1. Don't necessarily accept the criticism 

When Microsoft's antitrust problems started with the U.S. back in the 1990s, Microsoft made it clear that it didn't believe it was doing anything wrong. And the company fought and fought until it couldn't fight anymore. There is some debate over whether or not that was a good strategy, but considering Microsoft is still a single company generating billions of dollars every quarter, it certainly seems to have worked. And it's something that Google should keep in mind. 

2. Expect more trouble 

Whenever a major company gets hit with inquiries by governing bodies, one thing is usually certain: it doesn't end with one complaint. Microsoft has been hit from all sides by several government bodies for its actions across several different markets. Google has been hit hard by government bodies, as well. The last thing the search giant should do is expect them to end anytime soon. It's simply a cost of being big and successful. 

3. Focus on consumer opinion 

Microsoft forgot about consumer opinion when it waged its battles against government regulators. It was so concerned with winning or at least dulling the blow of a loss, that it forgot that all those complaints about its operation were hurting its brand. Right now, Google is still highly respected around the world. It can't let that love slip away as it battles it out with the EU. 

4. Don't lose sight of the core product 

Microsoft started out as a software company and it's still successful as a software company. Although it was forced to weather storms along the way, it ensured that its core product maintained its position of dominance. That's a valuable lesson for Google to learn. Search is central to its success. No matter how strongly the critics go after it, Google cannot allow it to buckle under that pressure.

 

Google Must Avoid an Endless Legal Battle


  

5. It's a serious concern 

Google should consider this EU investigation a serious concern. Although the company will likely get through it without too much damage, investigations such as these can hurt its brand image. It can put any company on the defensive and start to influence the company's operations and management. Microsoft is proof of that. And Google can't forget it. 

6. Regulators can change things 

Although Microsoft won't admit it, some of the company's divisions have been significantly affected by its battles with U.S. and European regulators. Most recently, Microsoft was forced to offer a "browser ballot" to European Windows users over the EU's concerns that its bundled Internet Explorer in Windows was anti-competitive. Granted, Internet Explorer is still tops in the browser market, but it's feeling more pressure than ever before. It has the EU to thank for it. 

7. Be prepared for more competition 

Microsoft's issues with regulators over the years have caused the company to miss out on some changing trends. While the firm was distracted with its legal battles, small, more nimble competitors were coming up with new ideas in several different spaces. One of those companies was Google. Going forward, that will likely happen with the search giant, as well. It's simply difficult to stay on the cutting edge while constantly fighting legal battles. 

8. Another Google is waiting 

When Google first launched, the company made it clear that it didn't want to "be evil." It was a thinly veiled jab at Microsoft, which some critics have called, the "Evil Empire." By drawing that line in the sand, Google made it clear that it was the "good force" against the presumptive "bad force." This image caught on with consumers. But if its legal troubles continue, Google might be in jeopardy of looking awfully Microsoft-like. Then it might only be a matter of time before another company comes along to "save the day." 

9. End them quickly

 Microsoft's legal battles have been going on for far too long. Issues started with U.S. regulators in the 1990s and in some way or another, are still affecting the company. Google can't have that. The company should do its best to move beyond these issues as soon as possible. As mentioned, the longer Google looks Microsoft-like, the worse it will be for its operation. 

10. Be ready to settle 

To avoid an endless legal war, it's important that Google be ready to settle if a deal makes sense. When Microsoft faced off with U.S. regulators, the company went to trial, lost face, and eventually settled with the Department of Justice. It was a mistake on Microsoft's part. Microsoft probably had this experience in mind when the company accepted the browser ballot with the European Union. Google should be ready to settle with the European Union if such an opportunity presents itself. That doesn't mean that it shouldn't fight clearly false allegations-it should. But as long as a potential settlement doesn't hurt the search giant too much, it's often times the best option.

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