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Google investigated for ad rates to Microsoft

The strained relationship between Microsoft and Google has came to a head with news today that U.S. antitrust officers are looking into Google practices on advertising rates for Microsoft.

According to the Bloomberg report, Google have been accused of illegally increasing their advertising rates by 50 times to the rival Microsoft organisation. The matter is being looked into, after complaints by Microsoft, and this is forming part of a much larger investigation into Google that began earlier this year.

If the complaint is found to be true then the FTC may be able to prove that Google have been abusing their power as the worlds largest search engine company, violating the Sherman Act and other antitrust laws.

Adam Kovacevich, a spokesman for Google said that company officials don’t yet know the details of the complaint by Microsoft, however he said that rates are usually decided in part by ‘how closely related an ad is to a users search’.

He said “One of the reasons our ad system works so well is that it is built on showing relevant ads to consumers.”

Bloomberg have confirmed that Jack Evans, a spokesman for Microsoft confirmed the complaints against Google and said ‘Google shouldn’t be permitted to pursue practices that restrict others from innovating and offering competitive alternatives. That is what they are doing now.’

The complaint is based around an ad rate for Windows Live. The cost increased to $5 per click, from 10 cents a click for placing a Windows Live Ad next to search results for the world ‘hotmail’.

Google explained that the rate was increased because users who clicked on the ad “were directed to a low- quality website.” Microsoft said the site was the home page for Windows Live.

Kitguru says: Microsoft and Google are bitter rivals in many arenas and we can’t see that changing anytime soon.

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