U.S. Senators, Microsoft Accuse Google of Anticompetitive Tactics
September 23, 2011 12:06 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
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.
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
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
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.
"I modded down, down, down, and the flames went higher." -- Sven Olsen
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