After years of allowing Google to trample intellectual property and privacy laws, antitrust regulators in the European Union (EU) are finally beginning to examine the online giant. And if the EU's experience suing Microsoft was any indication, Google could be in this for the long haul: The company controls seemingly unassailable positions in both online search and online search advertising, allowing it to enter other markets at will.
Its competitors say that Google's advertising monopoly and the income it generates gives the company an unfair advantage. To date, EU regulators have received three complaints against Google and the European Commission announced that it is launching an examination of the online giant's business practices. The Commission has asked Google for a formal response to the charges and will then determine whether to issue formal charges.
The complaints were all made by European companies though one, Ciao.de, is a German subsidiary of Microsoft. The other two are Foundem.co.uk, a UK-based price comparison site and Ejustice.fr, a French legal issues search site.
Google says it will respond to the EU as quickly as possible. "While we will be providing feedback and additional information on these complaints, we are confident that our business operates in the interests of users and partners, as well as in line with European competition law," Google Competition Counsel Julia Holtz said. She also added that "Microsoft is our biggest competitor and that explains many aspects [of this investigation]."
That's a cute sound bite, but I don't believe it's that simple. Google has grown so large so quickly that it can enter new markets at will and maintain money-losing products almost indefinitely. The company makes virtually all of its money on advertising but can leverage those revenues to enter and compete in markets where others cannot. Today, Google offers email, PIM, office productivity, smartphone, and other solutions that compete with the Microsofts and Apples of the world, and it seems to unleash new products and services every week.
Is Google the new Microsoft? Clearly, yes: Its ability to maintain money-losing products thanks to a single monopoly closely mirrors Microsoft's trajectory over the past 15 years. The only difference is that Google rose to power much more quickly than did Microsoft. But with that kind of power, of course, comes closer regulatory scrutiny. I'm only surprised that it took this long, given how aggressive the EU has been with other businesses