News Corp. and Google have lashed out at each other as the EU reconsiders the terms of its proposed antitrust settlement with the latter.
News Corp. essentially accused Google of nefarious behavior in a letter to outgoing European Commissioner for Competition Joaqun Almunia over the EU’s proposed antitrust settlement with Google.
Perhaps the irony of the situation hit Google hard — News Corp., after all, is not known for its scrupulous adherence to ethics.
Google responded by emailing a statement to BusinessInsider saying Murdoch was accusing it of eating his hamster.
The hamster reference harks back to a 1989 story published in News Corp. tabloid The Sun, perhaps best known for its publication of photos of topless girls on Page 3.
Google did not respond to our request for further details.
What News Corp. Said
Google’s “overwhelming power” has put the ability of Europeans to access information independently and meaningfully at risk, wrote News Corp. CEO Robert Thomson in the letter to Almunia.
Google is “sometimes contemptuous of intellectual property” and “routinely” weights search results in its favor, he asserted.
News Corp. used Google products and partnered with it on various projects, Thomson said, because it would be impossible not to given Google’s scale and influence, but “our cherished content is vulnerable to exploitation.”
Google was guilty of commoditizing serious content through aggregation, transferring the front pages of publishers to the Google home page, thus limiting publishers’ ability to generate advertising revenue, Thomson maintained. Data aggregators sell access to publishers’ audiences at steep discounts.
Google’s sudden changes in the ranking and display of search results “inevitably maximize income for Google and yet punish small companies,” he wrote, echoing accusations made by the European Magazine Media Association.
Further, Google’s certification process for Android-related products lets it delay or deny content companies and other businesses access to Android while letting it develop competing products, Thomson argued.
“At present, we are letting the letter speak for itself,” News Corp. spokesperson Jim Kennedy told the E-Commerce Times.
Never Mind the Hatfields and the McCoys
News Corp.’s letter and Google’s response are a continuation of a years-long battle between European publishers and Google.
The publishers blame Google for their losing money on the Web, and the News Corp. letter pretty much sums up their repeated complaints.
Google chairman Eric Schmidt penned a blog post on this issue earlier this month, dismissing — somewhat disingenuously — the publishers’ contention that Google is the gateway to the Internet.
Google has nearly 68 percent of the global search engine market, according to NetMarketShare. It has more than 80 percent of the European market.
Schmidt’s blog post drew mixed reactions from commenters:
“This letter sounds defensive and so unlike the Google we once loved,” responded schachin. “You have gone from beloved innovator to scary data hoarder, site destroyer.”
“Pity no one will believe you,” wrote lilburne.
On the other hand, “Thank you Google for all you do,” wrote Chris Horak. “… Even if you were acting anticompetitively I would argue that any accusations were baseless simply because Google’s own services are polished and, in my experience, far better than the competition anyway.”
Also, “If you don’t like how Google does business, don’t use Google,” DRH wrote. “Problem solved.”
The EU in February accepted Google’s proposal to settle an antitrust probe pending agreement with the 125 companies and organizations that filed complaints against the firm, but earlier this month began pressing Google to make changes.
Six of One, Half Dozen of the Other
“Many media and entertainment companies that don’t have effective distribution everywhere have opened channels on YouTube until they can build up their own distribution strategy. Then they complain about search going to YouTube,” Mukul Krishna, a senior global director at Frost & Sullivan, told the E-Commerce Times. “It’s a double-edged sword.”
However, News Corp.’s sympathy for the little guy is misplaced, Krishna contended.
“It makes me chuckle, because News Corp. is just trying to protect its vested interests,” Krishna said. “It’s just as likely to snuff out the little guy.”