Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

The U.S. government’s antitrust suit against Alphabet Inc.’s Google on Tuesday could deliver a huge opportunity for Microsoft Corp. to increase usage of its Bing search engine, an unexpected epilogue years after it abandoned a long campaign for legal relief.

From at least 2007 through 2015, Microsoft lobbied lawmakers, funded private lawsuits, commissioned opposition research and academic papers and even ran TV commercials, all with the aim of getting regulators to bar what it viewed as anticompetitive practices by Google.

Codenamed “Appendix A” inside Microsoft, the campaign failed to change Google’s behaviour or boost Bing’s market share, according to current and former Microsoft officials involved in the effort. Satya Nadella killed Appendix A by cutting funding and staff when he took over as chief executive in 2015, the sources said.

Story continues below advertisement

Yet, the concerns once expressed by Microsoft underlie the Justice Department’s new case.

Google cornered the web search and search ads markets by paying billions of dollars to smartphone makers, wireless carriers and browser makers to promote its search engine and penalizing them for showcasing rivals, the government alleges.

Google denied the claims in the lawsuit and called it “deeply flawed.”

The complaint quotes a Google executive as saying without the “really important” penalties, Bing could have stolen away the widespread promotion Google enjoyed. Another Google staffer is quoted as noting Google’s promotional deals with browsers are “a good way to keep [a browser] away from Bing.”

About 80 per cent of U.S. web searches go through distribution points that Google now owns or controls, leaving Bing with about 7 per cent of the market as the closest competitor, the lawsuit says.

Although Google said it is prepared to fight the lawsuit for years, the filing of the complaint is likely to motivate its search engine rivals to newly invest in improving their technology and challenging Google’s various restrictions to gain greater distribution, technology and legal experts said.

And if Microsoft’s response to a government antitrust lawsuit 20 years ago is any guide, Google may move more cautiously against rivals while the case plays out.

Story continues below advertisement

“Markets work better when firms know there is a sheriff in town,” said Chris Sagers, law professor at Cleveland State University.

Sridhar Ramaswamy, a former Google executive who now runs Neeva Inc., which is developing a paid, privacy-focused search engine, said that “we hope the DOJ’s actions will create a more equal playing field for search apps like Neeva that want to create real options for customers.”

Microsoft declined to comment for this story. It has answered questions about Google from investigators in several countries over the past two years, according to public records, but has not been pro-actively bashing Google, two academics and two lawyers once retained for anti-Google work said.

APPENDIX A

The Appendix A effort dated back to Microsoft’s frustration with Google’s 2007 acquisition of online advertising company DoubleClick for US$3.1-billion, or less than what Microsoft had offered, one source said.

Then-CEO Steve Ballmer organized a handful of people to understand Google’s strategy and fight the deal, which regulators approved over Microsoft’s objections.

The codename, according to sources, referred to the section within a paper written by Google’s co-founders in which they said “advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers.”

Story continues below advertisement

Microsoft tried to make a case to regulators and the public that Google hurt consumers by blocking them from alternatives and instead ironically providing low-quality search results because they were packed with ads.

Microsoft funded and managed anti-Google groups including FairSearch and Icomp, bringing on board other Google foes including Expedia Group Inc., Yelp Inc., News Corp. and Oracle Corp., sources said.

Microsoft-backed websites, such as SafeCloud.org, promoted articles raising concerns about the security of Google cloud services, one source said. One Microsoft staffer focused on bonding with small business aggrieved by Google, two other sources said, with some of the operations subsisting off Microsoft funding.

Political campaign strategist Mark Penn later joined in 2012 to produce the widely viewed “Scroogled” advertising campaign that criticized Google’s privacy practices and its ad-heavy product searches.

But when Mr. Nadella took Microsoft’s reins, he expressed concern that fighting the industry darling that was Google had hurt his company’s ability to hire, partner and attract new business, according to sources involved in the discussions. Mr. Nadella decommissioned the Appendix A team, cleared the air with Google, and began using Google-owned software to power Microsoft’s internet browser and some mobile devices.

Bing’s ad salespeople are among those inside that have agitated to renew anti-Google lobbying, sources said.

Story continues below advertisement

Meanwhile, Oracle and those other Google critics picked up where Microsoft left off, and have focused over the past five years on Google’s control over advertising technology used by publishers – a subject mostly left out of Tuesday’s complaint.

The Justice Department could introduce allegations related to Google’s advertising technology as soon as next month, again benefiting Microsoft, according to sources briefed on the investigation.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies