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February 18, 2009 5:31 AM

Microsoft news roundup: Obama's antitrust nominee calls Microsoft 'so last century'; Google sued for starving 'nascent competition'

Posted by Benjamin J. Romano

President Barack Obama's nominee to head the antitrust division at the U.S. Department of Justice isn't interested in Microsoft, according to comments she made last summer. "For me, Microsoft is so last century. They are not the problem," Christine Varney said during a June 19 American Antitrust Institute panel discussion, according to Bloomberg. The U.S. economy will "continually see a problem -- potentially with Google" because it already "has acquired a monopoly in Internet online advertising," she said.

Todd Bishop at TechFlash dug up the audio recording of the event and transcribed the entire passage:

"If any of my colleagues or friends from Google, or who represent Google, are here, I invite you to jump up and scream and yell at me. For me, Microsoft is so last century. They are not the problem. I think we're going to continually to see a problem, potentially, with Google, who I think so far has acquired a monopoly in Internet online advertising lawfully. I do not think they have done anything other than be a spectacular, innovative company. I'm deeply troubled by their acquisition of DoubleClick, and I'm deeply troubled by their deal with Yahoo. I submit to you that this administration, although they may open a investigation or a review of the Google-Yahoo deal, will do nothing. I think this is a classic area to explore, how do you apply Section 2 in a highly innovative, highly networked, not terribly competitive environment."

As Bishop points out, the Bush Administration did indeed have a problem with the Google-Yahoo deal, promising an investigation that ultimately stifled it.

Meanwhile, The Wall Street Journal reports that a small search engine startup, TradeComet, is suing Google on antitrust grounds. And the startup has retained outside lawyers who also represent Microsoft's Online Services Group -- though Microsoft is not providing support for the suit and was not aware of it prior to its filing. More on the complaint from WSJ:

"The antitrust complaint argues that Google tried to exclude vertical search engines like TradeComet's SourceTool from its search ad market to 'starve nascent competition.' In particular, Google 'manipulated its auctions so that SourceTool faced vastly higher prices to acquire search traffic,' according to the complaint, filed in U.S. district court for the Southern District of New York."

TradeComet is being represented by Cadwalader Wickersham & Taft. A Google spokesman told the Journal it had not reviewed the complaint yet, but called the online advertising market "highly competitive."

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