News

Microsoft, Google To Stop Calling Regulatory Foul on Each Other

• By Kurt Mackie
• April 25, 2016

Microsoft and Google have declared a ceasefire on filling legal complaints against each other with government regulators.

Re/code's Ina Fried first reported on this development in an article last week, in which Microsoft indicated it was withdrawing its regulatory complaints against Google, although still "competing vigorously." Google offered essentially the same statement.

"Our companies compete vigorously, but we want to do so on the merits of our products, not in legal proceedings," Google's statement explained.

The two statements didn't identify which complaints were being withdrawn, and there were no other published announcements on the matter from the companies. Fortune last week obtained the exact same quotes from Microsoft and Google. The two companies compete in terms of search advertising, mobile operating system platforms and various productivity applications.

Past Regulatory Shots
The use of regulatory complaints mostly has been a Microsoft tactic. For instance, in 2011, Microsoft got behind a legal complaint against Google lodged by smaller software companies before the European Commission. Microsoft had alleged that Google was limiting content that search competitors needed. It also complained that Google blocked YouTube content from working on Windows Phones, among other matters.

Microsoft also backed industry pressure group FairSearch.org and its complaints that Google was manipulating search results and stealing content from Web sites. Microsoft and FairSearch.org had opposed Google's plan to buy ITA Software, a deal that later got approved by the U.S. Justice Department.

Google, for its part, has lodged regulatory complaints as well. In 2007, it complained to the U.S. Justice Department that Windows Vista discouraged the use of non-Microsoft search tools on the desktop.

In 2013, Google settled with U.S. Federal Trade Commission on how it would license its intellectual property deemed essential under the "standard essential patents" concept. At stake were Google's charges for Wi-Fi wireless intellectual property use, which affected Microsoft's Xbox gaming platform.

Microsoft has long sparred with Google's hardware partners regarding alleged software patent infringements associated with the use Android, a Google-fostered open source mobile operating system. Those disputes mostly didn't involve regulatory agencies, though. It seems unlikely that Microsoft is signaling that it will veer from that legal tactic.

Google's New Android Troubles
Ironically, this new regulatory truce, suggested today by Microsoft and Google, is coming at a time when the European Commission is ramping up antitrust complaints against Google. Last week, the European Commission claimed that Google was abusing European Union antitrust laws with its Android licensing.

Per that complaint, Google is said to have pushed its search service as the default search engine on mobile devices sold in Europe. Android dominates the European market as about 80 percent of smart devices use that mobile OS, per the European Commission's announcement.

The European Commission claimed that mobile device manufacturers are required to pre-install Google's search engine and Chrome browser on Android machines. Google is also limiting the ability of device makers to run "competing operating systems based on the Android open source code." In addition, the commission objected that Google was offering financial incentives to device makers and mobile network operators to exclusively install Google search. For instance, access to the Google Play store is said to be contingent on pre-installing Google search.

Microsoft long ago went down a similar antitrust route with the European Commission, although its disputes mainly involved its Windows monopoly. The company at one point was considered a scofflaw by Neelie Kroes, European commissioner for competition, for not paying around $1.8 billion in penalties for abuse of its work-group server monopoly.

Microsoft also was compelled by the European Commission as the result of a 2009 complaint to offer a browser ballot in European Union countries with its Windows sales. The commission found that Microsoft had abused its Windows monopoly to push its Internet Explorer browser.