Microsoft: Hey, If We Had To Go Through Europe's Crazy Antitrust Process, Why Shouldn't Google?

from the at-least-they-see-the-irony dept

I've suggested in the past that neither Microsoft nor Google should be pointing the antitrust/monopoly finger at each other. After all, both companies seem prone to getting accused of antitrust violations. Yet, as a competitive tool to whack at competitors, it's apparently way too tempting. Not long after Microsoft spent years defending itself against antitrust charges in the EU, it has now filed a complaint against Google in the EU, alleging antitrust violations. To be fair, the company is pretty upfront about how this might seem ironic:

There of course will be some who will point out the irony in today’s filing. Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly. This is the first time Microsoft Corporation has ever taken this step. More so than most, we recognize the importance of ensuring that competition laws remain balanced and that technology innovation moves forward.

To be fair, the specific antitrust concerns that Microsoft General Counsel Brad Smith lays out against Google appear to be a bit more compelling than some of the previous attempts by Microsoft to make Google out to be a monopolist, such as silly claims about where companies appear in search results. Specifically, Microsoft highlights Google blocking access to certain YouTube data, so that only Google can provide good searches of YouTube videos, as well as blocking Microsoft's mobile platform from accessing more YouTube data, which is done by Android.

First, in 2006 Google acquired YouTube--and since then it has put in place a growing number of technical measures to restrict competing search engines from properly accessing it for their search results. Without proper access to YouTube, Bing and other search engines cannot stand with Google on an equal footing in returning search results with links to YouTube videos and that, of course, drives more users away from competitors and to Google.

Second, in 2010 and again more recently, Google blocked Microsoft's new Windows Phones from operating properly with YouTube. Google has enabled its own Android phones to access YouTube so that users can search for video categories, find favorites, see ratings, and so forth in the rich user interfaces offered by those phones. It's done the same thing for the iPhones offered by Apple, which doesn't offer a competing search service.

Unfortunately, Google has refused to allow Microsoft's new Windows Phones to access this YouTube metadata in the same way that Android phones and iPhones do. As a result, Microsoft's YouTube "app" on Windows Phones is basically just a browser displaying YouTube's mobile Web site, without the rich functionality offered on competing phones. Microsoft is ready to release a high quality YouTube app for Windows Phone. We just need permission to access YouTube in the way that other phones already do, permission Google has refused to provide.

While the full details aren't clear, and this is only one side, those do seem like valid concerns if it's true that Google is really limiting such access. The concern over antitrust is always in whether or not the company is abusing its position to hold back competition unfairly. I don't know if Microsoft has a case, and I'm especially skeptical of the EU's antitrust process, which seems more focused on punishing success than on making sure there's no real consumer harm. However, this is certainly going to be a case worth paying attention to over the next few years...

Filed Under: access, antitrust, eu, youtube
Companies: google, microsoft

Microsoft Wants To Make It Illegal To Buy From An Overseas Company That Uses Unauthorized Software

from the overreach-much dept

Microsoft's latest strategy against overseas infringement (something the company used to admit helped its bottom line in the long run) is to run around lobbying various state governments to pass ridiculous and likely unconstitutional laws that put liability on the buyers of any products from an overseas company that uses unauthorized software.

The laws allow Microsoft to block the US company from selling the finished product in the state and compel them to pay damages for what the overseas supplier did.

You heard me right. If a company overseas uses a pirated version of Excel, let's say, keeping track of how many parts it has shipped or whatever, and then sends some parts to General Motors or any large company to incorporate into the finished product, Microsoft can sue *not the overseas supplier* but General Motors, for unfair competition. So can the state's Attorney General. I kid you not. For piracy that was done by someone else, overseas. The product could be T shirts. It doesn't matter what it is, so long as it's manufactured with contributions from an overseas supplier, like in China, who didn't pay Microsoft for software that it uses somewhere in the business. It's the US company that has to pay damages, not the overseas supplier.

That seems like a pretty serious case of misplaced liability. However as Groklaw notes, Louisiana has already passed such a law, and it looks like Microsoft's home state (of course) of Washington is passing a similar law.

Thankfully, many businesses are realizing the incredible liability this could put on them, and are speaking out against the bill:

Regardless, piracy is Microsoft’s problem to solve as it has been trying to do for several years. It is a problem akin to what retailers call "shrink," or the loss of income from merchandise stolen either by outsiders or employees. Unfortunately, shrink is a painful cost of doing business. But retailers no more would seek Microsoft’s help with this problem than Microsoft should be asking retailers to help pay for solving its challenges with software piracy....

The bills under consideration are so sweeping in their scope they represent an invitation to a legal challenge on their constitutionality in light of federal copyright and trade authority. Even if this never became a U.S. constitutional debate, retailers are hardly capable of finding the means to assist Microsoft in becoming a worldwide police force to protect against software piracy.

This seems like a massive overreach by Microsoft, going even further than the entertainment industry's attempts to get ISPs to act as their copyright cops. In this case, Microsoft is trying to get any US company to be required to act as copyright cops for overseas suppliers, or face huge fines.

Filed Under: copyright, piracy, secondary liability, state laws
Companies: microsoft

US Gov't Supports Keeping Patents Difficult To Invalidate

from the government-wants-its-fees... dept

With the Supreme Court agreeing to hear the i4i vs. Microsoft patent case, we're starting to see the amici briefs, and the US government has decided to support those against innovation, by siding with i4i. This is a pretty sad statement about the US government's understanding of patents. If you don't recall, the lawsuit focuses on a single key issue:

In court, parties have to prove their case by some "standard of proof." In almost all civil cases, the standard is "preponderance of the evidence" -- meaning it is more likely than not that the facts are true. When the question is invalidating a patent, however, the U.S. Court of Appeals for the Federal Circuit decided that a defendant trying to prove a patent invalid must do so by a higher standard than normal civil cases, that of "clear and convincing" evidence. "Clear and convincing" means that the facts are "highly probable," which is a much more difficult standard to meet when trying to invalidate a patent than just a preponderance.

That's it. It's pretty simple. The bar for invalidating bad patents should be "the preponderance of the evidence." Anyone who has any experience in actually bringing innovative products to market, and facing a bunch of threats and lawsuits from patent holders who have obviously bad patents would agree that this makes sense (or, rather, would agree that moving in this direction makes sense). In fact, that's why tons and tons of successful companies supported Microsoft in getting the Supreme Court to hear the case.

So pardon me for finding it laughable when i4i's chairman, Loudon Owen, claims that switching the standard would mean innovative organizations can't survive:

"As you can see from the amicus briefs, and from a letter previously sent to the Attorney General by over 260 signatories, this is an absolutely pivotal case that threatens the ability of inventors and innovative organizations to survive,"

Let's be 100% clear here, because Owen is lying. If you have a legitimate patent, you have nothing to fear from this requested change. Even if you have a bad patent, it's unlikely that this change would mean much for you. It's only if you have a ridiculously bad patent that this change would have any impact. And that certainly is not about the ability of inventors or innovative organizations to survive. Oh, by the way, take a guess at the level of quality that i4i has with its patents? Yeah...

In the meantime, if you look at the list of folks who filed amicus briefs supporting i4i, you'll notice that it's basically a bunch of companies who rely on patent licensing, rather than products to get by. There's also a funny one about "leading venture capital firms," which doesn't list any actual "leading" VC firms. No Accel. No Sequoia. No Kleiner Perkins. No Union Square Ventures. Those are the firms that people get excited about. Those are the firms that everyone wants to raise money from. They're all absent. The rest of the list is a mix of "IP" organizations and pharmaceutical companies -- who are hanging onto patents as their last gasp effort to stay alive, since they're failing to actually innovate.

As for the brief from the US government itself, which is embedded below, it's pretty weak if you're familiar with the problem of bad patents. But it basically says the law (which, it should be reminded, was written by a former patent lawyer, and was done before the recent burst of massively bad patents), says we should use the higher standard, so we should. It's also laughable, in that it assumes that the US Patent Office actually does its job in making sure that patents are valid before allowing them.

Finally, we should note that, yes, there's tremendous irony in Microsoft trying to lower the standard for ditching bad patents, at the same time it appears to be relying on ridiculously bad patents in lawsuits itself.

Filed Under: bad patents, evidence, invalidating patents, patents, standard, us government
Companies: i4i, microsoft

DailyDirt: Computers Are Beating Us At Our Own Games

from the urls-we-dig-up dept

Artificial intelligence is a fun topic -- especially when it's applied to playing games with humans. The classic "man vs. machine" battles are always entertaining... until we hit the Singularity, and computer AI just consistently trounces humans in everything. Here are a few more examples of cool AI projects.

• Microsoft Research is working on AI that can play the ancient game of Go -- and incorporating it into an XBox Live game called The Path of Go. This is a pretty cool project to try to get more people playing go, but adding avatars and some storyline about finding your missing twin doesn't sound like a more fun way to play Go to me. [url]
• Starcraft is another AI challenge that requires more than fast reflexes and a pulse. Instead of creating supercomputers that play MMORPGs perfectly, I'd settle for AI that just happily mines gold for me all day. [url]
• Computers can also beat us at really simple games that you wouldn't think need any intelligence to play. So don't play Rock-Paper-Scissors to the death, and never wage a land war in Asia. [url]
• Maybe football coaches should be replaced by computers, too. When your fantasy league is short human players, try a few bots as competitive players. [url]
• If only the neural nets that play 20 questions were a bit more useful... These kinds of programs were supposed to help diagnose medical diseases, but now they just play trivial games and advertise for Whoppers. [url]
• To discover more interesting AI-related content, check out what's currently floating around the StumbleUpon universe. [url]  

By the way, StumbleUpon can recommend some good Techdirt articles, too.

Filed Under: 20 questions, ai, game algorithms, go, rock-paper-scissors, starcraft
Companies: microsoft

Microsoft Highlights Why Google's 'Cheater' Accusations Ring Hollow

from the good-for-them dept

We had a long discussion recently about Google's response to discovering that Microsoft used clickstream data from users to help improve the relevance of their own search. Microsoft's Yusuf Mehdi has now written up a much more detailed response from Microsoft's point of view, in which it again clarifies that contrary to Google's statements, Microsoft is not "copying" Google's search results, but merely using clickstream data as one of many (Microsoft says approximately 1,000) variables in improving search relevance. Microsoft does take one cheap shot: noting that, technically, the "honeypot" trick that Google used to uncover this certainly appears to be a form of "clickfraud." That is, it was a trick designed specifically to manipulate Bing's search results.

But the key point is made towards the end:

We have brought a number of things to market that we are very proud of -- our daily home page photos, infinite scroll in image search, great travel and shopping experiences, a new and more useful visual approach to search, and partnerships with key leaders like Facebook and Twitter. If you are keeping tabs, you will notice Google has "copied" a few of these. Whether they have done it well we leave to customers. But more importantly, we take no issue and are glad we could help move the industry to adopt some good ideas.

That's the point that I tried to make in the original post. History has shown that innovation occurs via competition, and part of that competition often involves competitors building on each other's work. A few months back, I wrote a review of the excellent book Copycats by Oded Shenkar, which makes this point very, very clear. Innovation happens when companies build on each other's work. But, what you learn is that it's not just about "copying," it's about all of the players learning, innovating and expanding the overall market. Just straight up copying rarely does enough to make a difference (in fact, we've discussed this problem in the form of cargo cult copying, where companies just copy some superficial aspect, and discover that it's meaningless). That's clearly not what Microsoft was doing here.

In the comments to our original post, someone made the comment, in defense of Google, by saying if what Microsoft did was okay, then couldn't he just go out and say "I've got a billion dollar search engine idea!" and then just copy Google's results. But, of course, if anyone actually thinks this through, they'd realize that copying Google's search results is not a billion dollar search idea. Assuming that, tomorrow, we launched a "new search engine" that gave the identical results to Google, almost no one would use it. Why would you? There's no real advantage to doing so. And for people who already use Google, it's probably much more integrated into their lives, with Gmail, Google Docs and more. The search results themselves are not the "billion dollar idea." It's the overall execution.

Hopefully Google learns from this and realizes that it has learned plenty from watching Microsoft as well, and complaining about Microsoft using clickstream data is a waste of time. Focus on continuing to innovate, Google, which'll probably mean learning more things from Microsoft, in addition to what you're doing yourself.

To be fair, Matt Cutts also has a put together a decent response, where he points out that the real issue here may be disclosure -- in that Microsoft did not clearly disclose that it was using clicskstream data (and especially how it was using that data). That's a perfectly reasonable point, but it was not the original point that Google raised. I agree that Microsoft could and should be much clearer in its disclosure -- but that's a totally separate issue. Cutts also explains why he thinks that Microsoft really is "copying," but again, even if we grant that premise (which I don't think is accurate), I still don't see why that matters. Copying and improving is a part of the innovative process. Google should embrace it.

Filed Under: bing, copying, innovation, search
Companies: google, microsoft

Google's Childish Response To Microsoft Using Google To Increase Bing Relevance

from the get-over-it dept

It's inevitable as a company gets bigger and older that rather than just competing in the market, it starts attacking competitors and accusing them of doing something "wrong." It's too bad that Google appears to have reached this stage. There have been plenty of stories lately about Google's decreasing relevance and how its search results have been getting worse. There are plenty of ways to respond to this and improving search quality should be the main focus. But it looks like Google has, instead, decided to call out competitors. Specifically, Google set up an elaborate and pointless "sting operation," which appears to show that Microsoft uses Google results as a part of its overall relevance algorithm. Basically, it looks like for users who have the Bing toolbar installed, Microsoft aggregates some search information, perhaps including Google results, and weighs them (only partially) into its own algorithm.

This seems like a perfectly reasonable thing to do. Google's search results are public and as an established player in the market, almost every comparison of alternative search engines, including Bing, compares it to Google. So, making use of Google data to improve its own rankings seems like a rather smart move.

Remember, too, that Google's own search algorithm is based on viewing what people are doing online and coming up with a ranking based on that. How is that any different than Microsoft viewing a variety of information online -- including Google's own search rankings -- and using that as the basis of its own rankings? But instead of recognizing that this is all perfectly reasonable, Google starts acting like the RIAA, accusing Microsoft of "cheating" and doing something that is potentially illegal. It even pops out this line from Amit Singhal, a Google Fellow who apparently oversees Google's search ranking algorithm.

"I've got no problem with a competitor developing an innovative algorithm. But copying is not innovation, in my book."

As if Google hasn't copied the work of others in the past? The very basis for the original Page Rank was "copied" from Jon Kleinberg's research and then built upon that work. It was not a direct copy, just as Microsoft's search results are not a direct copy. For Google to attack a competitor for using open information on the web -- the same way it does -- seems like the height of hypocrisy. It's fine for Google to crawl and index whatever sites it wants in order to set up its ranking algorithms, but the second someone looks at Google's own rankings as part of their own determination, suddenly its "cheating"?

This seems like the latest in a series of indications that Google has moved past the innovation stage into the "protecting its turf" stage. That would be a shame.

Filed Under: algorithms, bing, relevance, search
Companies: google, microsoft

Facebook's 3rd Biggest Advertiser Accused Of Being Affiliate Toolbar Scam; Facebook Says It's Never Heard Of The Company

from the just-like-the-old-days... dept

There have been numerous reports lately concerning just how much money Facebook is making on ads. That's part of the reason it was able to get that otherworldly $50 billion valuation from some. However, some are noticing something fishy in the Facebook ad business. After seeing an AdAge article mention in passing that the third largest advertiser on Facebook is not a household namebrand, but rather Make-My-Baby.com. Google's spam-catcher-in-chief Matt Cutts did some digging and quickly noticed that the site appears to be a sketchy toolbar installer that tries to switch you to using Bing, and then it gets an affiliate cut of any search ads you click on going forward. Cutts also points out that the URL to tell you how to uninstall the toolbar leads to a 404 page not found -- and many folks have had difficulty uninstalling the toolbar.

Marshall Kirkpatrick, over at ReadWriteWeb, digs in deeper and wonders if anyone at Facebook or Microsoft is actually minding the store. Even if they didn't directly know this was happening, if this is really the third largest advertiser on Facebook, both of those companies had to know something was up, just based on the numbers. A company like Facebook is intimately aware of its third biggest advertiser, and if the company is really driving that much traffic to Bing, then Microsoft would surely know about it as well.

Of course, this is where the story gets more bizarre. While Microsoft's response to this story was to cut off the company, Facebook's response was to claim that the company isn't an advertiser at all, let alone the third largest advertiser on the site. So how is it that reports suggest the company is the third largest advertiser, when Facebook claims they're not an advertiser at all? The company does have a slight hedge, by saying that "any affiliates that try to push people there we would shut down." So it's possible that it was hidden through some sort of affiliate setup before Facebook caught it -- but no one seems to be revealing any of the details.

Either way, all of this sounds quite reminiscent of the old adware days, where all sorts of sketchy companies would trick people into installing software to scrape up affiliate revenue. We hadn't seen much of that lately, as many of the old players eventually got wiped out, but it's hardly a surprise that similar schemes would quickly jump up in a Facebook world, whether or not it was officially through Facebook's advertising functionality.

Filed Under: advertising, affiliates, social networks, toolbars
Companies: facebook, microsoft