Google versus Microsoft: Battle of the monopolists

Google's recent announcement that it was asking the European Union's Competition Commission to let it join the anti-trust agency's investigation of Microsoft is one of the more ironic acts of recent economic history. Why? Because Google itself may become the target of U.S. anti-trust regulators. Call it the battle of the bulging monopolists.

Computerworld reports that the EU is investigating Microsoft for "shielding Internet Explorer (IE) from competition by bundling it with Windows." The newspaper reports that as a result of the investigation:

Microsoft could be fined, forced to let users choose alternate browsers to install in Windows or ordered to allow users to disable IE if a different browser is desired.

Norwegian browser maker Opera Software ASA originally filed the complaint in 2007. Mozilla, which makes Firefox, has been granted "interested third-party" status, which Computerworld says means the company can "submit arguments to regulators ... see the charge sheet the commission sent Microsoft and ... participate in a face-to-face hearing if Microsoft requests one."

Now Google is trying to get into the act as well. In the Google company blog Sundar Pichai, Google Vice President Product Management said that Google is applying for third-party status. Here's the core of his argument:

... the browser market is still largely uncompetitive, which holds back innovation for users. This is because Internet Explorer is tied to Microsoft's dominant computer operating system, giving it an unfair advantage over other browsers. Compare this to the mobile market, where Microsoft cannot tie Internet Explorer to a dominant operating system, and its browser therefore has a much lower usage. The value of competition for users (even in the limited form we see today) is clear: tabbed browsing, faster downloads, private browsing features, and more. Even greater competition will drive more innovation within browsers themselves -- as well as in web design, enabling sites to load faster and offer new kinds of interactive tools and applications.

Putting aside the merits of his argument, it's ironic that Google is going after Microsoft for monopolistic behavior, when Google itself may be similarly targeted in the U.S. As I've written about in a previous blog, the U.S. Justice Department may eventually put Google in its cross-hairs for an anti-trust investigation.

Christine A. Varney, President Obama's nominee to be the next anti-trust chief, has warned that Google already had a monopoly in online advertising. At a June 19 panel discussion sponsored by the American Antitrust Institute, she warned that Google "has acquired a monopoly in Internet online advertising." She also said that the company may be gaining the same monopoly in overall cloud computing as well. She's a vigorous advocate of aggressively enforcing anti-trust laws, and in fact, had lobbied for Netscape to investigate Microsoft for anti-trust violations.

Google is also building its dominance in overall Internet search, reaching 63.5% of overall market share by the end of 2009. More important, it was able to garner 90% of all the growth in Internet search in 2008, according to comScore.

So while Microsoft is being investigated overseas for anti-trust violations, Google may see the same thing here in the U.S.