Microsoft Testifies at House Hearing, Google Lashes Out

Posted on March 12, 2021 by Paul Thurrott in Google, Microsoft with 34 Comments

Image credit: Wikipedia

When Microsoft’s Brad Smith testified against Google at a House subcommittee hearing, the online giant lashed out in a way that can only be described as unhinged.

“While Google and Facebook have gained the most revenue from the shift to digital advertising, Google in multiple ways is unique,” Microsoft president Brad Smith’s written testimony to the House Committee on the Judiciary, Subcommittee on Antitrust, Commercial, and Administrative Law reads. “Google has been the biggest winner, capturing about a third of all digital advertising revenue in U.S. in the last year. Indeed, since its founding just over twenty years ago, Google has grown its global ad revenue to approximately $147 billion.”

Mr. Smith used the word “Google” 75 times in his written testimony, which was directed at an investigation into the negative impact on online advertising on journalism and our democracy. He noted that Google plays “multiple roles” in our online lives thanks to its dominance, and that Google has subverted journalism by stealing content that it thinks of as “food that feeds its search and advertising network” from those that create that content.

“Google has effectively transformed itself into the ‘front page’ for news, owning the reader relationship and relegating news content on their properties to a commodity input,” he testified. “The advertising revenue of the nation’s newspapers fell from $49.4 billion in 2005 to $14.3 billion in 2018. During this same time, Google’s advertising revenue rose from $6.1 billion to $116 billion. This is not a coincidence.”

Smith pointed at the success of Australia in getting Google to finally pay for the content it has, to date, stolen, and said that it was “proving effective” and could be used as a model for similar regulations around the globe. “We’re sensitive to the argument that we must avoid enacting a law that would ‘break the Internet’,” Smith added. “We would not have endorsed the Australian law if we believed there was any real merit to Google’s argument that the country’s legislation would have done that.”

Google’s reaction to this testimony is rather interesting, and it reminds me very much of Amazon’s unhinged reaction to Microsoft’s Joint Enterprise Defense Infrastructure (JEDI) contract award almost a year ago. That is, maybe it should have sat on this one for a day and thought it over.

“This important debate should be about the substance of the issue, and not derailed by naked corporate opportunism, which brings us to Microsoft’s sudden interest in this discussion,” Google’s Kent Walker rants in an op-ed in the Google Keyword blog. “We respect Microsoft’s success and we compete hard with them in cloud computing, search, productivity apps, video conferencing, email[,] and many other areas. Unfortunately, as competition in these areas intensifies, they are reverting to their familiar playbook of attacking rivals and lobbying for regulations that benefit their own interests. They are now making self-serving claims and are even willing to break the way the open web works in an effort to undercut a rival. And their claims about our business and how we work with news publishers are just plain wrong.”

Mr. Walker’s assertions that Microsoft taking a stand against it are “naked corporate opportunism” and “self-serving” are inflammatory, but they’re also hilarious. Of course, Microsoft is looking for a self-serving opportunity. It’s a corporation. That’s what corporations do.

But where Walker really loses the script is with the following bit in which he claims that Microsoft is only going down this path to draw attention away from the SolarWinds attacks. Yes, really.

“It’s no coincidence that Microsoft’s newfound interest in attacking us comes on the heels of the SolarWinds attack and at a moment when they’ve allowed tens of thousands of their customers — including government agencies in the U.S., NATO allies, banks, nonprofits, telecommunications providers, public utilities, police, fire and rescue units, hospitals and, presumably, news organizations — to be actively hacked via major Microsoft vulnerabilities,” Walker claims. “Microsoft was warned about the vulnerabilities in their system, knew they were being exploited, and are now doing damage control while their customers scramble to pick up the pieces from what has been dubbed the Great Email Robbery. So maybe it’s not surprising to see them dusting off the old diversionary Scroogled playbook.”

Actually, it is coincidental. That Google is being questioned about its destruction of journalism and being asked and perhaps forced to pay for news content that it had been stealing in the same rough time period as whatever Microsoft events is, of course, not of Microsoft’s doing. It literally is a coincidence.

As I’ve pointed out in the past, Microsoft can make these complaints because it, unlike Google, does not rely on advertising for a huge chunk (~80 percent) of its revenues. That’s doesn’t make Microsoft a “better” company than Google—a lot more goes into that—but it does mean that Microsoft is uniquely positioned to take this stance. And that it should want to take down one of a handful of major gatekeepers in Big Tech is, of course, likewise understandable. Per the earlier point, corporations compete with each other.


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Comments (41)

41 responses to “Microsoft Testifies at House Hearing, Google Lashes Out”

  1. j5

    That is pretty hilarious and crazy. You'd expect the CEOs and Execs of these major corporations to be able to handle accusations or even open and straight attacks better; especially in a public forum like a government hearing.

    Neither one is better than the other. But everyone knows, tech and normies, that Google dominates the ad space and knows you can get the news via or just "google" news and come up with free results.

  2. ebraiter

    While I am more of a Microsoft fan than Google, it isn't by much. Both are not my favorites. Google is definitely worse because of their history of fishiness. With Microsoft I disliked their telemetry crap.

    • Paul Thurrott

      The delta between Google's tracking, ads, and content theft and Microsoft's "telemetry crap" makes the Grand Canyon look like a crack in the sidewalk. Google is worse because of the sheer number of people it impacts every single day and because of the businesses it has destroyed. It's not even close.
  3. donaldhall3

    I worked at Microsoft for 13 years and Google for 3 and both companies are guilty of being awful. This delay and distract tactic was a favorite of Bill and Steve’s. Of course Google is going to do all it can to protect its revenue stream. As Paul would say “that’s what companies do”.

  4. ggolcher

    Whataboutism at its best

  5. winner

    So do I understand that Microsoft does not like a company that dominates its market?


  6. b6gd

    I am almost, kind of sorta, was on Google's side until they went off on a tangent with the SolarWinds stuff? Those are completely different issues.

    I was not a fan of Google before and now I am less.

    Then again I spent most of today troubleshooting some Dymo Label printing issue that I got dragged into and it turns out that the March Windows 10 update has broken over 100 Dymo Label printers used at our company. I am becoming less of a fan of Windows every day.

  7. wright_is

    In reply to SvenJ:

    I'd pay for maps on a per use basis. I probably use it once or twice a year. If certainly not subscribe to it.

    Pay for search? Yes, but not Google.

  8. jwpear

    Journalism has become such a sad state. If forcing companies like Google to pay for content meant we'd see higher quality journalism, I'm on board. And maybe this would foster a more competitive search market. I'm a little skeptical, but willing to see where this goes.

  9. spiderman2

    Australia: Hey, Google & Facebook, you have to pay us

    Facebook: F**k you

    Google: Sure thing Thumbs up, but let’s all agree that IT IS MICROSOFTS FAULT! 

  10. codymesh

    Big Tech more like Big Babies

  11. Greg Green

    Nice. Sometimes MS plays politics well.

  12. scovious

    "We respect Microsoft’s success and we compete hard with them in cloud computing, search, productivity apps, video conferencing, email," [and operating systems, all of which we could never succeed at without offering everything for free, subsidized by advertising or ripped and stolen content on the web.]

    I would love to see a version of Google that doesn't get to rely on its seemingly bottomless supply of ad revenue.

    • Username

      In reply to scovious: I would love to see a version of Google that doesn't get to rely on its seemingly bottomless supply of ad revenue.

      Microsoft tried advertising and failed - for a time they even bribed Bing users. Google won that war, why go backwards? Would Microsoft’s Chromium Edge even exist if it wasn’t for Google ad revenue?

    • winner

      In reply to scovious:

      You might not like it, but advertising is not illegal. I hope you don't use Google's services and think you should get them for free with the company having no way to create an income.

      • mikegalos

        In reply to Winner:

        You are correct that advertising (I assume you mean selling advertising) is not illegal BUT selling products below cost to affect the viability of competitors in a market is dumping and while dumping itself is also not illegal it IS abuse of monopoly power if you do it in a market where you have monopoly power.

        • winner

          In reply to MikeGalos:

          Agreed. The question is whether Google is linking to existing articles, or scraping and duplicating the news? That's a legitimate question.

          • Greg Green

            In reply to Winner:

            My experience as a non subscriber was about half of the headline links led to the actual publication, the other half led to a google page of the story. The google pages also included an option in the upper left to go to the originator’s page.

          • Paul Thurrott

            It's not a question. They are/were scraping, not just linking.
            • George Rae

              In reply to paul-thurrott:
              it is amusing to watch Google users become “Woke”. They have been the Walmart of the internet for quite sometime. destroying businesses is the model.

            • ianhead

              In reply to paul-thurrott:

              I'm glad that you pointed out the distinction there, but the strange thing for me is that I've never seen any scraping actually happening in Google's news pages here in Australia. Even when I look right now, there are only headlines, which take you directly to the source's site when clicked, and that's the way I've always understood it to be. No content from the articles is being relayed.

              That's one reason I actually think the Australian government is wrong to do what they have done, and I think the precedent being set is bad for the internet. I'm no fan of Google or Facebook, but the legislation doesn't even make a distinction between linking to articles or copying text from them wholesale. The verb they use is 'include', which could easily mean either thing.

              If Google is actually scraping content and displaying it on their own site anywhere, can't news vendors go after them under the DMCA for that?

      • samp

        In reply to Winner:

        Obsessive private data collection should (if its not) be illegal. I am a google fan (or maybe the google fan), but i do find its creepy tracking wrong. I don't use chromebook or Pixel for that reason (and the same with Facebook).

  13. cavalier_eternal

    So “self-serving” is fine because that is what corporations do then how is using the word to describe Microsoft inflammatory? Maybe pick a lane on that one.

    I read the full Google blog post and while a disagree with large chunks of it, there was nothing unhinged or rant like about it. Compared to Microsoft’s Scroogled stunt, which was childish if we are being generous, Google looks like a bunch of mild mannered adults.

    And because the go to defense is to accuse commenters of being biased and having an agenda when they disagree. I don’t use any Google products, I won’t use Google products and I would recommend against using Google products. When it comes to Microsoft, I use Microsoft products and I recommend them. So, no, I’m not pushing some sort of bias or agenda, I’m simply giving an honest assessment of the Google’s response.

  14. Chris_Kez

    I'm not at all a fan of Google, Facebook, or advertising, but I find it gross that Microsoft has sided with Rupert Murdoch in squeezing these companies purely for his own benefit. If Australia or any other country wants to find a way to fund journalism and local news, then come up with a clear taxing policy that does so and vote on it. Don't be a party to this bizarro idea that the value of news on Google and Facebook flows primarily from content creators to the platforms; it does not. It flows the other way. Google and Facebook would be just fine without Australian news sites, thank you very much. Those news sites, however, would suffer significantly if Google and Facebook stop sending traffic to them. I get that Microsoft sees an opportunity here to turn the screws on two big competitors, but to me at least, this undoes some of the goodwill they've built up over the last few years under Nadella.

    • anoldamigauser

      In reply to Chris_Kez:

      Politics makes for strange bedfellows.

      While I am sure that Microsoft is telling itself that it is helping all journalism outlets, in Australia, the Murdoch empire will benefit the most.

      • Paul Thurrott

        What. Microsoft is not telling itself anything, it's a company. Microsoft is competing with a company that silently tracks all of its users, steals content from content creators, and then makes billions of dollars off of those activities. What it's doing is telling regulators what Google is doing, and how that behavior has resulted in the current situation. Which is dire.
  15. yaddamaster

    "Do no evil" has been replaced by "Do evil at every opportunity"

  16. LT1 Z51

    The Ad Mob needs to be broken up. Giving stuff away for free to subversively "monitize" something in some other way should be illegal. I appreciate Google for Search, Maps, and Gmail and I would continue to use those services even if they were no longer Google. Same with Amazon and it's website. But the ecosystem and ad based services parts of the company can be put in a dumpster. The US broke up ATT in 1984, I don't see how Facebook, Google, Amazon, and even (to a lesser extent) Apple haven't be threatened seriously (until very recently) the way even Microsoft was in the late 1990's. I'd rather have the oligopoly of cablephonewireless companies (where 6-8 companies compete for my dollars) versus the various monoduotri-polies we have in Search (Google, and...?), E-mail (GoogleMicrosoft), Ads (GoogleFacebook), Social Media (FacebookTwitter), Web hostingdata analytics (AWS, and...?) and Phone OS (GoogleApple).

  17. ghostrider

    There all as bad as one another, but let's be clear, despite a more balanced tone, Microsoft's testimony was just as scathing and undermining, just with less 'rant'. MS have been under the cosh many times in their history - some of their tactics have been utterly appalling and have resulted in competitors being destroyed through nefarious means. MS are in no position to wear their holier-than-though; underdog 'poor me' hat yet again. Google are not cleaner than clean, but neither are MS, so they should both shut up and act like grown-ups. MS are obviously just trying to capitalize on this and stick the knife in.

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