by Patricio Robles
October 16, 2012 (TSR) – In 1998, the United States Department of Justice and 20 states filed a lawsuit against Microsoft alleging that the software giant abused a monopoly position in the market to dominate the market for web browsers.
The stakes were high. If it lost, Microsoft could have been forced to break itself into two parts. And even though it eventually settled under more favorable terms, the case against Microsoft is arguably the defining moment in the company’s history.
Microsoft’s experience is one that no company would hope to go through, but according to a report by Reuters’ Diane Bartz, it’s one that Google may soon be facing.
Sources close to the Federal Trade Commission (FTC) tell Bartz that four FTC commissioners “have become convinced after more than a year of investigation that Google illegally used its dominance of the search market to hurt its rivals.” Bombarded with complaints about Google’s behavior, the commissioners are expected to decide how to proceed before the end of the year.
Right now, according to Bartz’s sources, one outcome appears likely: the FTC will decide to pursue a case against Google.
Witch hunt?
If the FTC is looking for a reason to go after Google, it won’t have to work very hard to find one. As noted, the agency has been deluged by complaints from companies claiming that Google is using its dominance to thwart competition.
Some of the most widely-publicized complaints have to do with allegations that Google favors its own properties in vertical search results, but interestingly, vertical search may not be the issue FTC commissioners are eying. Bartz explains:
The one source said the FTC commissioners have given weight to…complaints that Google refuses to share data that would allow advertisers and developers to create software to compare the value they get on Google to advertising spending on Microsoft’s Bing or Yahoo.
In a related issue, the FTC is looking at Google’s handling of valuable patents, which are determined to be essential to smartphones. The agency is trying to determine if they are licensed fairly and whether patent infringement lawsuits are used to hamper innovation.
Google will lose, even if it wins
Clearly, if the FTC has decided that it needs to attack Google it can. And while Google may be confident that it will be able to defend itself against any antitrust charges leveled at it, there’s bad news: Google can’t win. For evidence of this, it need only ask its Redmond rival, Microsoft.
While Microsoft was successful in overturning the original verdict against it in the antitrust case (the judge deciding the case was found to have violated conduct rules by giving an interviews while the case was underway), the software giant decided to settle with the Department of Justice. The overall cost was huge. Millions upon millions of dollars were spent, the company took on obligations that lasted into this decade, and many believe that the case forced Bill Gates to resign his role as CEO of Microsoft.
In other words, Microsoft was never the same company following its battle with the U.S. government and it’s not difficult to make the argument that the significant challenges the company is facing today emerged, in large part, because of this.
How would Google walk a mile in Microsoft’s shoes? Assuming that the FTC does decide to allege antitrust violations, one thing is for sure: Google will emerge from the experience a different company. And that almost certainly isn’t a good thing for Google or the countless consumers who choose to use Google products.
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AUTHOR: Patricio Robles
Patricio Robles is a tech reporter and have been writing about technology, digital marketing and startups at Econsultancy since January 2009.
