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.

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: I like it when..
By NellyFromMA on 9/23/2011 8:55:31 AM , Rating: 3
So you like it when companies hide the best options from you so they can steal your business and leave you with less? Cool?

RE: I like it when..
By quiksilvr on 9/23/2011 9:30:08 AM , Rating: 2
At this point, it's too soon to tell the details of the case. Is Google charging all other email advertisers this amount, or is it just Microsoft? Is there a clear cut algorithm that determines the cost of the ad with relation to the search input?

After seeing the bullsh|t Oracle put Google through only to find out one of their high ranking peoples embraced Google and Java relationships, I'll wait until all cards are on the table before making an opinion on it.

RE: I like it when..
By NellyFromMA on 9/23/2011 11:12:17 AM , Rating: 2
Definitely too soon, its just going by the OP, he seemed to indicate we should just trust the players involved and not scrutinize it. I was just trying to highlight why that makes no sense to me. But good point none-the-less

RE: I like it when..
By Reclaimer77 on 9/23/2011 10:45:45 AM , Rating: 2
So you like it when companies hide the best options from you so they can steal your business and leave you with less? Cool?

It's not Google's job to inform you of all the options out there. There are other search engines and services out there for you to use. Of course Google is going to recommend their own services first, that doesn't mean they "stole" your business.

Why don't you sue Verizon because they "hid" the fact that Sprint had a better plan for your phone?

RE: I like it when..
By NellyFromMA on 9/23/2011 3:36:53 PM , Rating: 1
Ohhhh cool, an angst response. -_-

Thanks for clearing that up 'bud', its all clear to me now!

On a more serious note, I never claimed that that was Google's job.

However, if they are manipulating SEARCH results (you know, their actual 'job' if we have to use your sad terminology for simplicity sake) to put a larger weight on their services for their gain, that tends to be a monopolistic and antitrust-like action.

So, Verizon's job isn't to give me search results, or advertise for a competitor. Unfortunately, if a competitor offers a more relevant product, it sort-of IS Google's job. At the very least, Google can not hide results in favor of its own unless in fact it is not the result of bias.

That's the game they chose. So Reclaimer, pls reclaim common sense and get back to me. Or better yet, don't. Thanks!

RE: I like it when..
By Reclaimer77 on 9/23/2011 4:10:26 PM , Rating: 2
So, Verizon's job isn't to give me search results, or advertise for a competitor. Unfortunately, if a competitor offers a more relevant product, it sort-of IS Google's job.

It is?

Can you please find it in writing somewhere that says a search engine must be completely unbiased and never favor in-house results? What law is being broken? And I don't think "anti-trust" is going to fly because there's no monopoly here and never was.

Search engines NEVER before operated by relevance until Google. This was the way things were ALWAYS done in the past. Google was the one who sorted results by relevance and other factors, I find it comical that you now claim it's the "job" of a search provider to do this in an argument against Google. The company who practically invented the modern search engine.

Common sense? This isn't a court case, it's simply an investigation backed by huge lobbying money from Microsoft and others. You're already clearly accusing Google of wrongdoing before we've heard any facts.

Google has won EVERY SINGLE private lawsuit against it. As recently as this year in Ohio against I find it really hard to believe that if there was genuine wrongdoing on the scale that Microsoft is accusing them of, that all of these cases would rule in favor of Google.

RE: I like it when..
By NellyFromMA on 9/28/2011 11:11:38 AM , Rating: 2
Are you the type of person where everything needs to be spelled out for you? It's implicit. Google, or any search engine, can't REALLY expect to survive and remain profitable (search ads) if in fact it is not providing me the most relevant ads. Are you having a hard time comprehending because this seems really clear to me and I'm blown away at your large quantity of words and yet utter lack of content in your response.

RE: I like it when..
By NellyFromMA on 9/28/2011 11:14:34 AM , Rating: 2
Also, you can talk abotu the past all you want, but believe it or not, peopel actualyl expect search results to be sorted by relvance now. Like it or not, its been like that for at least a decade and its largely responsible for how dependant people have become on the internet, and in turn, on Google's search results. If you can't wrap your head around how the market has asically made that the implicit standard, you have much bigger issues than your flame posts.

RE: I like it when..
By JonnyDough on 9/23/2011 3:04:31 PM , Rating: 2
It's nothing new, Microsoft (and formerly Yahoo before being bought) did the same exact crap. Why would you NOT list your company first? Nobody said they couldn't advertise using their own browsers, search engines, etc. Consumers catch on, and use something else. Free market.

RE: I like it when..
By NellyFromMA on 9/28/2011 11:21:45 AM , Rating: 2
I don't think they should be unable to advertise on the most used search engine in the world, they should just make it obvious and seperate it from actual search results as a courtesy to their users.

Essentialy throw it right in with the paid-for ads, you know, the ones that also get preferential treatment. That's all.

I'm sure there are logistical reasons why they may not (they potentially sacrifice a paid ad spot or 'bombard' users with more ads) but I still think this is the better solutions. I only like Google for relevant information. Nothing else.

"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer

Most Popular Articles5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
No More Turtlenecks - Try Snakables
September 19, 2016, 7:44 AM
ADHD Diagnosis and Treatment in Children: Problem or Paranoia?
September 19, 2016, 5:30 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
Automaker Porsche may expand range of Panamera Coupe design.
September 18, 2016, 11:00 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki