Google Says It's Willing To Change Search To Avoid EU Fight (GOOG)

Google CEO Eric Schmidt told the Telegraph newspaper that the company is willing to change how its search algorithms work, as long as the changes don't help spammers game search results.

Gosh, how nice of Google to agree to cooperate with regulators! Within reason, of course.

Google will soon learn that the EU is boss, and doesn't particularly care what the companies it investigates say to the press.

As Microsoft learned last decade, once the European Commission has launched a formal investigation, it may investigate almost anything, for any amount of time, and can take advice from any party it likes, including competitors to the company being investigated. It is under no particular obligation to share what it's digging up until it issues an official Statement of Objections, and that can take months. Or years.

In the meantime, companies under investigation have no way of guessing what the EU might ask them to do.

Google can say it's willing to change its search algorithms, but the EU hasn't asked it to make any changes yet.

Once the specifics come out, Google may think the EU is asking it for too much. If so, it will fight, argue, and appeal just like Microsoft did -- anything less would be a breach of duty to shareholders. And if it fights, it will probably lose. Just like Microsoft did.

Microsoft seems to have learned its lesson: in 2009, the Commission issued a statement of objections about Web browser choice, saying that Microsoft wasn't playing fair by bundling Internet Explorer with Windows. Instead of striking a belligerent pose, Microsoft immediately suggested a couple of changes, including a "ballot" that would let users pick a default browser upon startup. The EU accepted and the investigation ended without any fines.

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Google Says It's Willing To Change Search To Avoid EU Fight (GOOG)

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Here's What Google Can Expect With EU Investigation, Says Microsoftie

The European Union has slowly started turning the antitrust crank against Google, announcing that it's launching an investigation into the company for unfair business practices. The EU is investigating complaints from small niche search engines that Google has systematically lowered rankings for those sites in its search algorithm, and it will also look to see if Google gave its own Web services preferential placement.

Microsoft famously went through the EU wringer earlier this decade, and ended up paying more than a billion dollars in fines. It was also forced to reveal more information about technical protocols used by Windows and other products, and to offer an alternate version of Windows without the Windows Media Player, which nobody bought.

A Microsoft manager who worked on the digital media team during this period explained what Google should expect. (He asked to be quoted anonymously, as all official comments about legal cases are supposed to come from Microsoft's lawyers or public relations groups.)

Here were his nuggets of wisdom:

• The EU will listen to your competitors, but not to you. In the digital media case, the EU seemed to believe what RealNetworks and other competitors told it: that there was a dynamic market for software-based digital media players, if only Microsoft would stop shutting them out. When Microsoft tried to respond by explaining the realities of the market--for instance, PC makers don't want to give customers too many choices of default software because it raises support and manufacturing costs--the EU didn't listen.

• You're dealing with regulators, not techies. The EU seemed to believe that removing the Windows Media Player was as easy as uninstalling any other application. When Microsoft tried to explain that the Player had deep ties within the guts of the OS, and asked specific questions like "which DLLs would you like us to remove?" they were met with meaningless answers or silence.

• You're subject to new rules now, but you can't know what they are. Software development at Microsoft is always subject to limits: processor speeds, development time, finances, and the laws at physics. When the EU--and the U.S Department of Justice before it--declared Microsoft a monopoly, the company suddenly was subject to new rules. Unfortunately, until the legal cases were finished, Microsoft employees didn't know exactly what those rules were. And there's no way to find out except to be sued and lose.

• You'll have to make unexpected adjustments. During the EU and DoJ investigations, Microsoft employees had to learn all kinds of things they could previously ignore, like the ins and outs of attorney-client privilege in email. You can't just put a signature file saying "this email is covered by attorney-client privilege" and make it so, as some employees seemed to think. Eventually, Microsoft made all sorts of legal information available to employees, but it took time.

• The EU will impose a remedy to save face. This employee wasn't close to the EU's reasoning, but the order to ship a version of Windows without the Media Player was never going to work--and he thinks the EU knew it. But after spending years and millions of dollars of taxpayers' money, the EU couldn't just say "pay a big fine and nothing else has to change." It had to impose a behavioral changing remedy, even if it turned out to be ineffective.

• Don't take your eye off the competition. The EU investigation did change how Microsoft does business in some critical ways--the rulings gave the company certain new rules which it now abides by, such as "you must offer consumers a way to remove Windows features" and "no integrating formerly separate products (like Bing search) with Windows without talking to the lawyers." It also showed Microsoft that it needs lobbying power with governments, and couldn't afford the faux-naive "we're just a little technology company" stance that it took in the 1990s. But in the end, competition in the digital media market was restored by competitors, not the EU. One big competitor in particular: Apple. As this employee said "we didn't stop doing PlaysForSure because the EU made it, we did it because we kind of got our asses handed to us."

In Google's case, that means staying focused on Facebook and--yes--Microsoft. Indeed, Microsoft seems to have learned at least one lesson very well: one of the complainants to the EU is a shopping search engine called Ciao, which Microsoft acquired in 2008.

Join the conversation about this story »

See Also:

• Google Is Now Officially Evil
• Google Suing U.S. Government Over Refusal To Consider Google Apps Over Microsoft
• Google Embraces And Extends Microsoft Office

Here's What Google Can Expect With EU Investigation, Says Microsoftie

Backlink: http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/z6A9FdpeQnM/heres-what-google-can-expect-with-eu-investigation-says-microsoftie-2010-11

Here's What Google Can Expect With EU Investigation, Says Microsoftie (GOOG, MSFT)

The European Union has slowly started turning the antitrust crank against Google, announcing that it's launching an investigation into the company for unfair business practices.

Microsoft famously went through the EU wringer earlier this decade, and ended up paying more than a billion dollars in fines. It was also forced to reveal more information about technical protocols used by Windows and other products, and to offer an alternate version of Windows without the Windows Media Player, which nobody bought.

A Microsoft manager who worked on the digital media team during this period explained what Google should expect. (He asked to be quoted anonymously, as all official comments about legal cases are supposed to come from Microsoft's lawyers or public relations groups.)

Here were his nuggets of wisdom:

• The EU will listen to your competitors, but not to you. In the digital media case, the EU seemed to believe what RealNetworks and other competitors told it: that there was a dynamic market for software-based digital media players, if only Microsoft would stop shutting them out. When Microsoft tried to respond by explaining the realities of the market--for instance, PC makers don't want to give customers too many choices of default software because it raises support and manufacturing costs--the EU didn't listen.

• You're dealing with regulators, not techies. The EU seemed to believe that removing the Windows Media Player was as easy as uninstalling any other application. When Microsoft tried to explain that the Player had deep ties within the guts of the OS, and asked specific questions like "which DLLs would you like us to remove?" they were met with meaningless answers or silence.

• You're subject to new rules now, but you can't know what they are. Software development at Microsoft is always subject to limits: processor speeds, development time, finances, and the laws of physics. When the EU--and the U.S Department of Justice before it--declared Microsoft a monopoly, the company suddenly was subject to new rules. Unfortunately, until the legal cases were finished, Microsoft employees didn't know exactly what those rules were. And there's no way to find out except to be sued and lose.

• Don't pretend you're a lawyer. During the EU and DoJ investigations, Microsoft employees had to learn all kinds of things they could previously ignore, like the ins and outs of attorney-client privilege in email. You can't just put a signature file saying "this email is covered by attorney-client privilege" and make it so, as some employees seemed to think. Eventually, Microsoft made all sorts of legal information available to employees, but it took time.

• The EU will impose a remedy to save face. The order to ship a version of Windows without the Media Player was never going to work--and this employee suspects the EU knew it. The regulators weren't stupid. But after spending years and millions of dollars of taxpayers' money, the EU couldn't just say "pay a big fine and nothing else has to change." It had to impose a behavioral changing remedy, even if it turned out to be ineffective.

• Don't take your eye off the competition. The EU investigation did change how Microsoft does business in some critical ways--the rulings gave the company certain new rules which it now abides by, such as "you must offer consumers a way to remove Windows features" and "no integrating formerly separate products (like Bing search) with Windows without talking to the lawyers." It also showed Microsoft that it needs lobbying power with governments, and couldn't afford the faux-naive "we're just a little technology company" stance that it took in the 1990s. But in the end, competition in the digital media market was restored by competitors, not the EU. One big competitor in particular: Apple. As this employee said "we didn't stop doing PlaysForSure because the EU made us, we did it because we kind of got our asses handed to us."

In Google's case, that means staying focused on Facebook and--yes--Microsoft. Indeed, Microsoft seems to have learned at least one lesson very well: one of the complainants to the EU is a shopping search engine called Ciao, which Microsoft acquired in 2008.

Join the conversation about this story »

See Also:

• Google Is Now Officially Evil
• Google Suing U.S. Government Over Refusal To Consider Google Apps Over Microsoft
• Google Embraces And Extends Microsoft Office

Here's What Google Can Expect With EU Investigation, Says Microsoftie (GOOG, MSFT)

Backlink: http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/z6A9FdpeQnM/heres-what-google-can-expect-with-eu-investigation-says-microsoftie-2010-11

Comment on EU Wants Google Street View Curbed by EU Could Turn Google, Facebook Into Privacy Felons: Tech News «

[...] hard-nosed on privacy as it applies to services like Facebook and Google’s Street View, which has been criticized for a number of reasons, and faced potential restrictions from European states even before the company admitted that its [...]

Post originale: http://gigaom.com/2010/02/26/eu-google-street-view/#comment-302093

Comment on Facebook Apps Leaking User Info to Third Parties by EU Could Turn Google, Facebook Into Privacy Felons: Tech News «

[...] Facebook — which is facing a potential government inquiry in the U.S. related to the transmission of personal details via some of the apps that run on the network — has also faced scrutiny from a number of EU states, including [...]

Post originale: http://gigaom.com/2010/10/17/facebook-apps-leaking-user-info-to-third-parties/#comment-302095

Comment on Google in Catch-22 Over Wi-Fi Data and Privacy by EU Could Turn Google, Facebook Into Privacy Felons: Tech News «

[...] The recommendations were made in a paper presented by the European Union’s executive body, which is responsible for proposing legislation and enacting standards for the EU and consists of a cabinet with 27 commissioners, one from every member state. The European community has been fairly hard-nosed on privacy as it applies to services like Facebook and Google’s Street View, which has been criticized for a number of reasons, and faced potential restrictions from European states even before the company admitted that its Street View cars were inadvertently capturing personal data. [...]

Post originale: http://gigaom.com/2010/05/27/google-in-catch-22-over-wi-fi-data-and-privacy/#comment-302094