Print 27 comment(s) - last by NellyFromMA.. on Sep 28 at 11:21 AM

Microsoft says Google unlawfully overcharged it for advertisements

U.S. antitrust regulators are looking into whether Google unlawfully increased advertising rates 50-fold for Microsoft Corp., according to Businessweek.

Earlier this year, Microsoft filed an antitrust complaint against Google in Europe saying that the Internet giant was dominating the search market as well as other areas such as the mobile-related realm. Around that same time, the U.S. jumped in on the Google antitrust bandwagon when Senator Mike Lee (R-Utah) called for a hearing on Google's possible anti-competitive practices.

The Federal Trade Commission (FTC) began investigating the accusations against Google's behavior on June 24, 2011, sending subpoenas to several companies including Microsoft. The FTC is looking to figure out whether or not Google ranks its own search results above rivals' results, and whether or not Google uses its control of the Android mobile OS to discourage smartphone makers from using other applications. Overall, the FTC hopes to reveal (with the help of companies like Microsoft) whether Google has been abusing its dominant position in many different areas.

The U.S. Senate prepared to question Google and Executive Chairman Eric Schmidt earlier this week regarding these antitrust issues. In a U.S. Senate Judiciary antitrust committee hearing this week, U.S. lawmakers further criticized Google claiming that Google favors its own services over rivals when it comes to search.

Now, the FTC is investigating a few specific complaints from Microsoft, one of which claims that Google unlawfully increased advertising rates 50-fold for Microsoft. This complaint is part of the larger ongoing investigation of Google's possible anti-competitive practices.

Microsoft initially complained about the increased ad rate back in 2007. According to Microsoft, the cost for placing a Windows Live ad next to search results for the word "Hotmail" went from 10 cents per mouse click to $5 per mouse click. Businessweek's anonymous source said during that time, Google told Microsoft that the price increase was due to users being directed to a low-quality website when clicking on the ad -- but the website was the homepage for Windows Live, which includes Hotmail.

Adam Kovacevich, a Google spokesman, said that he was unaware of the details of Microsoft's allegations concerning the ads, but noted that rates are usually partially determined by how closely an ad is related to a user's search.

Microsoft Spokesman Jack Evans said that Google shouldn't be allowed to continue stopping others from "innovating and offering competitive alternatives."

The FTC is also investigating Microsoft's complaint that Google pressured advertisers to partake in contracts that make it challenging to advertise with rivals like Yahoo and Bing. In addition, Microsoft accused Google of producing hurdles that block advertisers from comparing the number of times users click on their ads they run on Google as opposed to other rival sites.

Google claimed 59 percent of the U.S. online search advertising revenue in the second quarter of this year while Microsoft claimed 9 percent and Yahoo claimed 7 percent.

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Yeah right
By TSS on 9/23/2011 8:24:50 AM , Rating: -1
Damn EU. How dare they sue another big company! their just trying to steal as much from US companies as possible!

... what? This is in the US? Naw it couldn't be. Must be the EU commission behind this.

(if you americans get to complain when the EU investigates somebody we europians damn well get to laugh when the US does the same. looking forward to comments on how this is somehow legit while the same case in the EU isn't).

RE: Yeah right
By NellyFromMA on 9/23/2011 8:52:28 AM , Rating: 2
Hi, hate monger # 2349823423048234. I think you miss the main reason why US people have gotten annoyed over (largely BS) antitrust cases from the EU against US companies. This is US companies dealing with US regulators. It's a stupid case, but its not fundementally stupid on all levels. It's worth hearing out. Whereas EU basically telling MS what to do, and the VERY SPECIFIC contents of that arguement (they just wanted Mozilla to dethrone IE) so hence it was political as well as financial for the EU. This is different. Is that enough details or do you just want to stick to mongering?

RE: Yeah right
By seamonkey79 on 9/23/2011 8:53:25 AM , Rating: 2
Let's see if they actually find something anti-competitive, rather than the normal "they're big enough to pay so they have to pay" that the EU finds...

RE: Yeah right
By Savvin on 9/23/2011 9:00:09 AM , Rating: 2
Well, the big difference here is that the US Government isn't suing Google. They are investigating them on the behalf of other businesses. Nowhere does it state that the US Gov. is looking for financial compensation (overly hefty fines that are way beyond reasonable like the EU normally does.) Seriously, if you really look at it from the outside, most of the EU cases end up with ridiculously high fines that only make it seem like the EU is making an easy cash grab. It's almost never seen as a benefit to the people or other businesses. Just do a comparison of similar cases in the US compared to the EU and you will see what I'm talking about. In almost every similar case, fines and penalties are several times higher in the EU without any legitimate reason as to why that is. Again, seems to me like an easy cash grab by the EU.

RE: Yeah right
By tayb on 9/23/2011 9:32:41 AM , Rating: 3
We are complaining about the EU siphoning money out of American corporations for completely nonsense reasons.

You sued Microsoft $1,000,000,000 for including a browser with the OS. I wonder what the backlash would be if the US fined BMW the same amount for including a factory sound deck in their automobiles. That's anti-competitive to the sound deck market.

"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il

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