from the this-is-known-as-hypocrisy dept
We recently mentioned the
latest round of Microsoft's antitrust fight, dating back to some of its actions around Windows 95. To be clear, I think the action against Microsoft is pretty silly. It's pretty clear that the market is quite capable of dealing with any perceived Microsoft "monopoly" and routing around it. That said, one thing that is quite stunning in all of this is the sheer hypocrisy from Microsoft in discussing this case, as compared to Microsoft's own efforts to drag Google into an antitrust battle as well. Now, some will shrug and say that this is basic self-interest on Microsoft's part. It's always going to favor things that help Microsoft. But it certainly seems to weaken the validity and credibility of Microsoft's arguments.
Back in March, we noted just how ridiculous this was, when Microsoft
complained about Google to the European Union, whining that Google made it difficult for Microsoft's platforms (mainly the Bing search engine and Microsoft's mobile platform) to access YouTube video data. At the time Microsoft's General Counsel sure seemed to insist that Google had a
duty to engineer its platform to make life easier for its competitors. Here's the quote we highlighted back in March:
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.
Note how in both paragraphs, Smith seems to clearly suggest that Google has a duty to engineer its products to make life easier for Google's own competitors.
Okay. Now, jump over to the ongoing antitrust lawsuit against Microsoft by Novell. And note how Microsoft's lawyers
appear to argue directly against this idea that a company should have a duty to build its products to help competitors:
Microsoft attorney Steve Aeschbacher said Novell is saying it wishes Microsoft would have developed Windows 95 differently than it did.
"The law basically doesn't require people to design their products to the whim or demand of other companies. You get to design your own products. There isn't any legal obligation for us to do what they wanted us to do," he said.
Seems to directly contradict what Microsoft said just months ago when it was talking about Google. Furthermore, in Microsoft's
motion for summary judgment (pdf) in the current case -- a brief you can be sure MS General Counsel Brad Smith was well aware of -- Microsoft again appears to argue the exact opposite of what it said in regards to Google just months ago:
The allegations underpinning count I are premised on the notion that Microsoft
had some affirmative duty to assist—or to continue assisting—a competitor. Novell
complains that Microsoft harmed its office productivity applications designed for use with
Windows 95 by (i) discontinuing the formal documentation of six APIs in pre-release
versions of Windows 95, (ii) failing to include in Windows 95 certain functionality that
Novell would have liked, and (iii) failing to endorse Novell’s applications by granting Novell
a license to use the Windows 95 logo. These allegations are not cognizable under the
antitrust laws.
The objective of our antitrust laws is to promote competition. Successful
companies—even monopolists—are encouraged to compete vigorously. Foremost Pro
Color, Inc. v. Eastman Kodak Co., 703 F.2d 534, 544 (9th Cir. 1983) (“A monopolist, no less
than any other competitor, is permitted and indeed encouraged to compete aggressively on
the merits.”). Monopolists are encouraged to innovate and are entitled to retain the benefits
of such innovation. Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 281 (2d Cir.
1979). Moreover, a monopolist is not required to help its smaller rivals or shield them from
the rigors of competition. Olympia Equip. Leasing Co. v. Western Union Tel. Co., 797 F.2d
370, 375-76 (7th Cir. 1986) (“A firm with lawful monopoly power has no general duty to help its competitors.”); Twin Labs., Inc. v. Weider Health & Fitness, 900 F.2d 566, 568 (2d
Cir. 1990) (“Antitrust law . . . does not require one competitor to give another a break just
because failing to do so offends notions of fair play.”).
I agree very much with the Microsoft filing in this case. Antitrust law shouldn't be about propping up competitors or requiring a company to engineer its products in a certain manner to help competitors. And while I understand that Microsoft's position will shift depending on whatever benefits Microsoft best, it seems like the company is being ridiculously short-sighted in being so blatantly hypocritical and inconsistent. It hurts its chances in this particular lawsuit, and it hurts Microsoft's overall credibility. While I understand that Microsoft thinks tossing around antitrust accusations at Google may make life difficult for Google, it seems like
both companies would be a lot better off
if neither of them tossed antitrust arguments at the other. It seems only likely to backfire.
Filed Under: antitrust, brad smith, competition, responsibility
Companies: google, microsoft, novell
