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Astroturfing Antitrust: How Microsoft is Crafting the Grassroots Case Against Google

Microsoft (MSFT) has begun a proxy war, using foreign partners and lobbyists to drum up antitrust claims against Google (GOOG) where none existed. Google accused Microsoft of inflating the case to provoke government involvement. Microsoft has responded simply: that's how the game is played. Some examples are obvious. The Italian site Ciao, a search engine for comparison shopping, was a loyal Google customer for several years, before being taken over by Microsoft in 2008. Renamed Ciao from Bing, the company has gone on to lodge numerous complaints with Google about standards and practices, eventually filing suit in European court.

Other times Microsoft played it subtle. One suit against Google came from Foundem, a British price comparison site. That company turned out to be a member of ICMOP, the Initiative for a Competitive Online Marketplace, a Brussels-based group created and funded by Microsoft. The organization has a wide range of members, from a British PR firm to a Polish ad agency to a Spanish cheese maker who confessed that he did not even own a computer, but had signed on because he opposes monopolies in general.

The same kind of faux grassroots have emerged stateside. Take the Google merger with Yahoo, which fell apart following antitrust scrutiny. During those proceedings Congress received a letter from the American Agricultural Movement opposing the merger. But Larry Matlack, president of the AAM recently told the WSJ,

From my point of view, I wouldn't know if they got 10% of the market or 99%. I use Google, but I'm a Kansas farmer and president of a small manufacturing company, and I'm computer illiterate other than the things I have to do.
Matlack said he signed the letter on the suggestion of the lobbying group LGM, which prepared the letter for Congress on behalf of Microsoft.

These kinds of tricks are the hard won lessons of Microsoft's own legal battles with antitrust from the 1990s, when the firm was seen as the number one threat to a competitive marketplace in the computer industry. Complaints from companies like Cisco, Netscape and others laid the groundwork for the Justice Department to take on Microsoft. Now the roles are reversed, as Microsoft tries desperately to slow the growth of Google and carve out market share for its own search engine Bing.

The wave of complaints in Europe have had some success, provoking a preliminary investigation by an EU commission. The question that remains is whether or not Microsoft can prove Google's dominance is the result of unfair business practices, not superior search quality.

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