When Microsoft recently announced its proposal to acquire
Internet search giant Yahoo! for $44 billion, two things were
immediately certain. First, consumers would be likely to see
enormous potential benefits from a merger between the two
companies. Second, bureaucrats, rivals, and Microsoft-haters of all
shapes and sizes — but especially those that rhyme with frugal —
would do anything they could to slow or stop the deal.
Where there are clouds and lightning one can eventually expect
to hear thunder. And behold, Google came booming through the
stratosphere, or at least the blogosphere, with carefully-worded but dire warnings. The Chief
Legal Officer for the leading search engine weighed in with a
lawyerly series of leading questions:
Could the acquisition of Yahoo! allow Microsoft —
despite its legacy of serious legal and regulatory offenses — to
extend unfair practices from browsers and operating systems to the
Internet?…Could a combination of the two take advantage of a PC
software monopoly to unfairly limit the ability of consumers to
freely access competitors’ email, IM, and web-based
services?
Could they? Might they? Will they? The forces of Google, while
careful not to make any outright accusations, certainly hope you
think so. They hope to plant that thought in the minds of
legislators and regulators.
“Policymakers around the world need to ask these questions,” the
statement explains.
All these questions are being asked because Google has a sincere
concern for the well-being of you, the ordinary Internet searcher,
right? That’s what the company claims:
We take Internet openness, choice and innovation
seriously. They are the core of our culture. We believe that the
interests of Internet users come first — and should come first —
as the merits of this proposed acquisition are examined and
alternatives explored.
Who could doubt the sincerity of that statement? The company’s
motto, after all, is “Don’t Be Evil.” When Google mouthpieces tell
the story, their prime concerns are consumer welfare and the health
of the Internet.
Right. Google’s real concern has nothing to do with welfare and
a whole lot to do with market share. Right now, Google leads the
online search market by substantial margins. Worldwide, its share
of search-related revenues hovers around 75 percent. In the U.S.,
roughly 65 percent of all searches are conducted through Google. In
Europe, that number is nearly 90 percent.
Should Microsoft, with its number three-ranked search engine,
link up with Yahoo, which sits at number two, it wouldn’t represent
a threat to a competitive marketplace — but it might represent a
threat to Google’s current dominance of it.
In other words, Google is pushing for regulatory action to shore
up its own business model. Rather than compete in on an open
playing field, it hopes to batter its competitors with a
bureaucratic bludgeon.
“Don’t be evil”? Try, “Don’t mess with my turf.”
IN FACT, GOOGLE has a history of supporting restrictive regulations
that bolster its business model under the guise of do-goodery. The
company has been an outspoken supporter of “net neutrality,” a policy likely
to stifle innovation on the Internet’s infrastructure, but which
also helps keeps Google’s costs down by forcing Internet service
providers to shoulder more of the burden.
The search giant has funneled more than a
million dollars into the coffers of liberal activist group
MoveOn.org to promote that group’s stance on the issue. The company
has also fought, with some success, to force open-access restrictions that favor its own business model onto
valuable wireless spectrum auctioned off by the government.
None of this is to say that Google isn’t an innovative company
with numerous smartly engineered products — products that have
earned it no small amount of public good will. But good products
don’t always make for good policy. Google isn’t looking for a level
playing field; it wants to tilt the terrain in its favor.
Meanwhile, Microsoft’s size, success, and history of antitrust
skirmishes make it an easy target. But size alone is no reason to
complain, and the antitrust crusades against Microsoft have been
misguided.
In Europe, for example, the company had to deal with years and
millions of dollars worth of legal trouble simply for including
media player with its Windows operating system. That’s right:
Microsoft was attacked for making software with too many
features that its customers might find useful.
MICROSOFT’S LEGAL HISTORY gives Google an opening to wreak havoc
with the Yahoo! acquisition, and the search giant has made clear
that it intends to exploit the opportunity to the fullest. The
motivation for this may go beyond simple business calculations.
Remember, last year when Google began its move to acquire online
advertising firm DoubleClick, Microsoft raised a racket about
potential antitrust violations and privacy concerns. The deal
eventually went through, after a difficult, months-long series of
regulatory delays. But “we want revenge” doesn’t play quite as well
as “we’re just looking out for the good of others.”
Readers may love Gmail, don’t they shouldn’t be fooled by the
search giant’s goody-two-shoes posturing. In the case of the
Microsoft-Yahoo deal, Google’s conception of “good” is
Machiavellian — just another excuse for pushing regulators to lean
on the competition.
Perhaps a new company credo is in order. Don’t be evil? Well, at
least try not to look it.
