Microsoft’s first antitrust target: Google

How the tables have turned. Microsoft, a company that is no stranger to regulator scrutiny, is planning to file an antitrust complaint against Google in Brussels today, the New York Times reports.

The move will be Microsoft’s first antitrust complaint against another company, which makes it more significant than a typical antitrust cry. Simply put, it’s a sign of desperation. The antitrust complaint tells us that Microsoft can no longer compete with Google directly, especially when it comes to Google’s key search technology and that it has no recourse but to try to slow down Google’s progress through other means.

Why Europe? According to the NYT, Microsoft is hoping that European officials, who have already received complaints against Google from smaller companies, will impose limits on Google. And of course, Microsoft is also hoping that US officials take the hint.

Microsoft and other companies claim that Google has undermined its competition when it comes to search, its Android mobile software, and online advertising. In particular, Microsoft says that Google prevents other search engines from fully indexing information from its services like YouTube. Microsoft’s Bing search engine, which has slowly eked out a small amount of search market share, is Google’s only big search competitor at the moment (Yahoo is now powered by Bing as well).

Microsoft’s complaint will likely have more weight in Europe, where Google’s search engine is even more dominant than it is in the US (with over 90 percent market share in most EU countries, compared to 65 percent in the US).

The company also says that Google is holding tight technical information that would offer a better YouTube experience for its Windows Phone 7 platform. Microsoft says that both Android and Apple’s iPhone OS support that technical information in their YouTube applications. Google has also released an updated mobile website for YouTube that would work across all mobile browsers, but Microsoft clearly doesn’t find that an adequate solution. (Personally, I find YouTube’s new mobile site far more usable than the Android or iPhone apps.)

Microsoft also takes issue with the way Google handles its ad contracts. Google keeps ad buyers from using third-party apps that compare ad pricing results and allow them to easily switch between ad platforms.

It’s worth noting here that Microsoft would likely be making the same decisions Google is now if their places were switched — and if Microsoft hadn’t already faced major scrutiny for its competitive tactics in the 1990s. In 2001, Microsoft entered into a settlement with US regulators that forced it to tone down its previous bully-like tendencies. The company has also faced fines and other rulings from European regulators.

Microsoft still needs to prove to European regulators that Google is harming consumers with its market advantages. That’s tough to show for search engines, according to antitrust expert Herbert Hovenkamp, because consumers can easily switch to another one.