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Google’s behind-the-scenes actions allegedly were the motivating force behind the European Union’s $732 million fine of Microsoft March 6.
The European Commission—the EU’s antitrust arm—levied the fine against Microsoft for failing to offer a choice of Web browsers to early users of its Windows 7 computer operating system, which the company must do as part of a 2009 settlement regarding the same issue.
But instead of the most recent investigation originating from the EC itself, the suggestion for the latest probe secretly emanated from two companies, Google and Norway-based Web browser vendor Opera Software, according to a March 6 report from The Financial Times.
“The U.S. software group was left to police its own compliance and [Joaquín Almunia, the EU’s competition commissioner] said the lapse was brought to his attention by a Microsoft rival,” reported The Financial Times. “According to people involved, Google and Opera informally provided the tip-off and helped investigators.”
Never before had the EU levied a penalty on a company for violating a settlement, the paper reported.
The March 6 fine against Microsoft came after European regulators told the software company that it had failed to comply with the terms that were laid out in the 2009 settlement over the Web browser issue. The matter had been unnoticed for about a year, according to The Financial Times.
Microsoft apologized for what it called a “technical error” that led to the problem in about 28 million PCs that were using early versions of Windows 7 with Service Pack 1, and also took “full responsibility” for the issue. Under the 2009 settlement, Microsoft was required to display a Browser Choice Screen (BCS) on PCs in Europe, where Microsoft’s Internet Explorer is the default browser, and while it did in some cases, it failed to do so in others.
Interestingly, Google has also been dealing with its own EU investigations in recent years as the organization has been looking into antitrust concerns involving Google’s search practices and the company’s dominant position in search.
Google officials are under investigation in Europe regarding its search engine, which holds more than 60 percent of the search market, with Microsoft’s Bing being a distant second. Competitors have claimed that Google works its search algorithms to favor its own products and results over those of others, giving it an unfair advantage in search and Web advertising.
A similar antitrust probe into Google in the United States was resolved in Google’s favor in January. Instead of an antitrust prosecution in United States, Google entered into a voluntary agreement with the Federal Trade Commission to change some of its business practices to resolve the complaints of some competitors about Google’s practices.
In the U.S. case, Microsoft led a fight with other technology companies to argue for strong FTC actions against Google to punish it for what they believed were unfair business practices.
That continuing rivalry is certainly one of the reasons that Google was reportedly behind the EU’s latest fine against Microsoft, said Dan Maycock, an IT analyst with Slalom Consulting.
“It doesn’t surprise me,” said Maycock. “I imagine they were talking to the EU about this situation” to try to put themselves in a better light.
For Google, which has been under the microscope of public opinion in Europe with the EU case, that makes perfect sense, Maycock said. “Legally it would have to give them some sort of leverage, maybe it gives them some time” by essentially dropping a dime to report Microsoft, while diverting attention for a bit from its own case. “What would [Google] have to gain by just taking it to Microsoft like that?”
In Opera’s case, Maycock said he’s not sure why that small company would get involved in this matter.
Meanwhile, Microsoft is apparently not sitting by quietly in the aftermath of the latest scrum with Google.
In fact, Microsoft is backing a proposed new law in Massachusetts that would affect Google and its Google Docs and Apps products, according to a March 6 story in The Wall Street Journal. The bill “would restrict the commercial use of data gathered while children use computers at public schools,” which “appears to take aim at Google’s growing business of providing basic software like email and word processing over the Internet, which, in turn, is a growing threat to Microsoft’s cash-cow suite of Office tools.”
According to the story, “Microsoft acknowledges it is behind the Massachusetts legislation and that the bill is aimed at business practices employed by Google.”
The fight for supremacy between the two companies is apparently far from over.