Microsoft President Brad Smith speaks (L) and Sundar Pichai from Google.
Microsoft and Google argued on Friday over their practices and the treatment of news agencies in a battle between past and present antitrust goals.
In his written testimony to a hearing before the House Justice Subcommittee on Friday, Microsoft President Brad Smith said Google has made journalism companies dependent on its many services, including analytics and advertising tools, while benefiting from access to their content. Smith said Google relied on content from these outlets to motivate its users, citing its own experience with Microsoft’s Bing search engine.
According to Smith, Google’s referral traffic has real value for news agencies, but “monetizing that traffic has become increasingly difficult for news companies as most of its profits have been squeezed out of Google.” He pointed to a sharp decline in newspaper advertising revenue from $ 49.4 billion in 2005 to $ 14.3 billion in 2018, according to Pew Research. During the same period, Google’s advertising revenue grew from $ 6.1 billion to $ 116 billion.
“It’s not a coincidence,” he said.
Google reached out to Smith in a statement released prior to the hearing, recalling Microsoft’s antitrust investigation two decades ago.
“We respect Microsoft’s success and compete fiercely with them in cloud computing, search, productivity apps, video conferencing, email, and many more,” said Kent Walker, Google’s senior vice president of global affairs, all in one Blog post. “Unfortunately, as competition in these areas increases, they are returning to their familiar playbook of attacking rivals and advocating regulations that benefit their own interests.”
“They are now making selfish claims and are even poised to break the workings of the open web to undercut a rival,” wrote Walker. “And their claims about our business and how we work with news publishers are just wrong.”
While Google has been on the cutting edge of antitrust enforcement more recently, and several lawsuits have been filed by the federal government and attorneys general, Microsoft was at the center of a landmark antitrust case around the turn of the century. That lawsuit, alleging that Microsoft illegally maintained a monopoly and ousted competition by tying its Internet Explorer browser to PCs using its operating system, deeply informed the current allegations against Google, which include alleged anti-competitive contracts .
Walker claimed Microsoft’s testimony dates back to the same time.
“This latest attack marks a return to Microsoft’s longstanding practices,” he wrote. “And it is no coincidence that Microsoft’s newfound interest in attacking us comes immediately after the SolarWinds attack and at a time that has allowed tens of thousands of its customers – including US government agencies, NATO allies, banks, and Non-customers. ” Profits, telecom providers, public utilities, police, fire and rescue workers, hospitals and presumably news organizations – to be actively hacked through major Microsoft vulnerabilities. “
Microsoft ran a campaign against Google around 2012, mocking its services with a parody called “Scroogled”. The campaign was designed to alert consumers to allegedly unfair practices by Google and instead redirect them to Microsoft’s search competitor. Walker said the recent attack was reminiscent of the “old distracting Scroogled game book”.
The two giants last grappled with a similar issue in Australia, where work was being done on new laws that would make Facebook and Google news publishers pay to be linked to their content. While the legislation was ultimately watered down after Facebook redeemed its promise to stop displaying news content in the country, it warned tech companies that more changes could be on the way in other parts of the world.
Although Google never sourced its news service from Australia and ultimately signed contracts with publishers, Microsoft had signaled that it was ready to step in if Google removed its news service. The company said it would be willing to abide by Australian rules if it were subject to them and would not threaten to cease operations.
Walker said in the statement on Friday that Google remains committed to working with news organizations and policy makers “to give journalism a strong future.”
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