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Microsoft Hires Political Bully

Dec 19th, 2012 | By | Category: Featured Articles

Mark Penn

Microsoft’s income last year ($23 million) was more than double Google’s. If bullying is the use of force or coercion to hurt someone smaller or weaker, then Microsoft’s hiring of an expert in political dirty tricks as part of a campaign to damage Google is a destructive response to their mounting frustration with losing billions of dollars a year in their effort to overtake Google in Search while losing ground to Google in the browser and smartphones markets and other areas.

According to the NYTimes, “The campaigns by Mark Penn, 58, a longtime political operative known for his brusque personality and scorched-earth tactics, are part of a broader effort at Microsoft to give its marketing the nimbleness of a political campaign, where a candidate can turn an opponent’s gaffe into a damaging commercial within hours.”

The Kitchen Sink

“Google should be prepared for everything but the kitchen sink thrown at them,” said a former colleague who worked closely with Mr. Penn in politics and spoke to the NYTimes on condition of anonymity. “Actually, they should be prepared for the kitchen sink to be thrown at them, too.”

Microsoft has long attacked Google from the shadows, whispering to regulators, journalists and anyone else who would listen that Google was a privacy-violating, anticompetitive bully. The fruits of its recent work in this area became visible today after a former commissioner for the Federal Trade Commission published an Op-Ed article in the NYTimes decrying Google as the Emperor of All Identities and the FTC postponed its planned announcement of the results of its antitrust investigation of Google, pushing it to next year.

Attacking From The Shadows

Pamela Jones Harbour is a lawyer representing companies — including Microsoft — for Fulbright & Jaworski. Pamela Jones Harbour She was a member of the Federal Trade Commission from 2003 to 2010. In her Op-Ed piece in the NYTimes she said “Now, the F.T.C. has another chance to protect consumers, promote innovation and ensure fair competition online. In making its decision, it must understand that while Google may be the runaway leader in Web search and online advertising, its most troubling dominance is in the marketplace of private consumer data. If real competition in this area can be restored, I am confident that market forces will provide the incentives necessary for companies to offer attractive services and relevant, engaging ads without violating consumer privacy.”

How does increasing competition diminish data collection?

evil“They’re pulling out all the stops to do whatever they can to halt Google’s advance, just as their competition did to them,” Professor Cusumano told NYTimes. “I suppose that if Microsoft can actually put a doubt in people’s mind that Google isn’t unbiased and has become some kind of evil empire, they might very well get results.”

Google’s Conduct is Pro-Competitive

Susan A. Creighton, a partner in the Washington office of Wilson Sonsini Goodrich & Rosati, is in Google’s corner according to the NYTimes. She has testified before Congress on Google’s behalf and negotiated with the Federal Trade Commission, the agency conducting the antitrust investigation, and where she was a senior official during the Bush administration.

“Google’s conduct is pro-competitive,” Ms. Creighton declared in her Senate testimony last year. “Far from threatening competition, Google has consistently enhanced consumer welfare by increasing the services available to consumers.”

Ms. Creighton hits two main themes in Google’s defense. The first is the consumer benefit of all Google’s free services. The second is that the cost to consumers of switching to Internet alternatives like Microsoft’s Bing search engine, the Expedia travel site or Yelp local listings is “zero,” she said. Or, as Google repeatedly says, competition is “just a click away.”

MarkPennCallout1

It is not an antitrust violation for a powerful company to gain a dominant share of one market and then expand into other markets. The legal issue is the tactics the dominant company employs to expand its empire. Microsoft’s campaign of political negativity echoes Microsoft’s own antitrust suit in the 1990s. A similar investigation by the European Union is also wrapping up. A bad outcome for Google in either one would be soggy substitute for victory by Microsoft as it slips farther into obsolescence.

Update January 3, 2013

The Federal Trade Commission on Thursday handed Google a major victory by declaring that the company had not violated antitrust or anticompetition statutes in the way it arranges its Web search results. According to the NYTimes, “The unanimous decision by the five-member commission guarantees that consumers will continue to be steered toward Google’s own related services when they search for something that they want to buy, like airline tickets or appliances. It also validates Google’s position as the leading search engine on the planet. Google accounts for more than 70 percent of consumer searches in the United States and an even bigger share in some overseas markets.”

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