The Microsoft Google Antitrust Wars

By Keith Hylton

Posted on March 15, 2010

According to recent news reports, Google claims that several antitrust complaints against it by rival firms are supported in some way by Microsoft. Officials at Microsoft admit that Google’s rivals have come to talk to them about their gripes against Google, but say that executives at those firms have made up their own minds about whether to file complaints.

I see no reason to even try to determine the merits of these claims. Suppose, however, that the worst case scenario (from Google’s perspective) is true: that Microsoft is quietly supporting and instigating antitrust complaints against Google. What should we think about that?

Perhaps the first thing to say is that it is not clear whether it would be relevant in any legal sense, if it is true. Many, perhaps all, of the antitrust complaints against dominant firms brought to enforcement agencies come from rival firms, and those firms often talk to other firms about their complaints. Nothing new there. This is a bit like the “discovery” in Casablanca that there was gambling in Rick’s place.

Setting aside the law, the question that remains is whether it would be a wise strategy for Microsoft to support antitrust complaints against Google, or for Google to support antitrust complaints against Microsoft. On the wisdom question, I think there is a “discovery” worth making. Both Microsoft and Google will suffer in the long run from their current policies on antitrust complaints.

Microsoft has already been the target of aggressive antitrust claims. Google is on deck to receive its share. Both firms, because of their global reach, face the risk of seeing rivals run to the European Commission and other competition authorities with novel and ever more extravagant theories of anticompetitive harm.

One of the recent claims against Microsoft before the European Commission led to the requirement that Microsoft provide a “ballot screen” that allows European consumers to choose the web browser that they wish to use as their default option. The complaint was filed by Opera, but Google stood to benefit from the investigation and appears (from news reports) to have publicly supported the complaint. Given the amount of effort firms have put into promoting browsers – e.g., Google’s effort to promote Chrome – I fail to see why Microsoft should subsidize the marketing of rival browsers. Besides, only a handful of people – perhaps living deep in forests on the Marshall Islands – are not already aware of the existence of rivals to Microsoft’s browser.

So there is a pattern that runs something like this. A small rival of either Microsoft or Google runs to a competition authority to file a complaint. If the complaint is against Microsoft and threatens to constrain Microsoft in some area in which Google has an interest, Google stays quiet or publicly supports the complaint. Similarly, if the complaint is against Google, Microsoft stays quiet or supports it.

This is a myopic policy. Both firms should recognize that they benefit most from a set of clear, predictable competition rules that enable dominant firms to take procompetitive actions, such as optimizing existing technology, without fear of antitrust punishment. Both firms should speak in favor of such rules, and stand ready to condemn complaints against the other when those complaints are likely to lead to regulations that are more harmful than beneficial to consumers.

I see no need for Microsoft and Google to have a meeting to jointly adopt this new policy. That might raise a new antitrust complaint, based on collusion. Each firm should announce the new policy unilaterally.


About the Author

  • Keith Hylton
  • Boston University
  • 765 Commonwealth Ave.
    Boston, MA 02215

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