Google,Apple join MS in antitrust battle
For Microsoft, the world’s biggest software company, run-ins with antitrust regulators have become de rigueur. This week, European Union officials concluded that the firm had failed to comply with penalties imposed in 2004 for anticompetitive behaviour; a large fine is looming.
On July 4, Microsoft also suffered a legal setback in South Korea, where it is embroiled in another battle with regulators. But Microsoft is not alone. Two of its rivals—Google and Apple— each seen as the anti-Microsoft in their own markets are running into modest antitrust problems, too.
On June 29, Google introduced an online-payment service called Checkout, which is intended to compete with the PayPal service owned by eBay. It is a digital wallet that simplifies how people pay for things over the Internet. To entice merchants to adopt the system, Google discounts the fee when they also buy advertisements sold through its hugely successful AdWords system.
That has raised some eyebrows, because this tactic, using a strong position in one market (online ad-placement) to establish a foothold in another (payments), is exactly what has landed Microsoft in so much hot water over the years.
The dominance of Microsoft’s Windows operating system helped it win widespread adoption of its webbrowser and media-player software.
Google can rightly claim that it is not forcing customers to take the two together, as Microsoft did. Yet it will be concerned at this week’s indication by a federal judge in California that he may allow a suit against the company based on an entirely different complaint.
Kinderstart.com has accused Google of violating antitrust law by changing its search algorithm so that Kinderstart’s website plunged down the search rankings, causing its traffic to decline by 70%. Google denies that it deliberately modifies results to favour particular firms, and also argues that search rankings constitute opinions, and are thus protected as a form of free speech in any case.
Meanwhile, Apple is also feeling the antitrust pitchfork. Last week, French legislators passed a law that requires content downloaded from online stores to be playable on all types of portable player, unless copyright holders grant their permission otherwise. Today, music purchased from Apple’s iTunes Music Store can be played back only on Apple iPods and these iPods cannot play music bought from rival online stores such as Napster, which uses Microsoft’s digital-copyright system, or Sony’s Connect.
Although customers may find this annoying, it is unclear whether it is an abuse of market power to lock in users. Other countries, including Norway, Sweden and Denmark, are considering similar rules.None of these examples is in the same league as Microsoft’s woes. Neither Apple nor Google has anything like the market dominance that Microsoft has in operating systems.
But they are evidences of regulators’ and legislators’ readiness to mess around with new markets that would be better left alone and of competitors’ tendency to egg them on.The Economist
On July 4, Microsoft also suffered a legal setback in South Korea, where it is embroiled in another battle with regulators. But Microsoft is not alone. Two of its rivals—Google and Apple— each seen as the anti-Microsoft in their own markets are running into modest antitrust problems, too.
On June 29, Google introduced an online-payment service called Checkout, which is intended to compete with the PayPal service owned by eBay. It is a digital wallet that simplifies how people pay for things over the Internet. To entice merchants to adopt the system, Google discounts the fee when they also buy advertisements sold through its hugely successful AdWords system.
That has raised some eyebrows, because this tactic, using a strong position in one market (online ad-placement) to establish a foothold in another (payments), is exactly what has landed Microsoft in so much hot water over the years.
The dominance of Microsoft’s Windows operating system helped it win widespread adoption of its webbrowser and media-player software.
Google can rightly claim that it is not forcing customers to take the two together, as Microsoft did. Yet it will be concerned at this week’s indication by a federal judge in California that he may allow a suit against the company based on an entirely different complaint.
Kinderstart.com has accused Google of violating antitrust law by changing its search algorithm so that Kinderstart’s website plunged down the search rankings, causing its traffic to decline by 70%. Google denies that it deliberately modifies results to favour particular firms, and also argues that search rankings constitute opinions, and are thus protected as a form of free speech in any case.
Meanwhile, Apple is also feeling the antitrust pitchfork. Last week, French legislators passed a law that requires content downloaded from online stores to be playable on all types of portable player, unless copyright holders grant their permission otherwise. Today, music purchased from Apple’s iTunes Music Store can be played back only on Apple iPods and these iPods cannot play music bought from rival online stores such as Napster, which uses Microsoft’s digital-copyright system, or Sony’s Connect.
Although customers may find this annoying, it is unclear whether it is an abuse of market power to lock in users. Other countries, including Norway, Sweden and Denmark, are considering similar rules.None of these examples is in the same league as Microsoft’s woes. Neither Apple nor Google has anything like the market dominance that Microsoft has in operating systems.
But they are evidences of regulators’ and legislators’ readiness to mess around with new markets that would be better left alone and of competitors’ tendency to egg them on.The Economist
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